India has to be prepared for higher tariffs in the Trump regime and slower global export growth, which will present challenges, chief economic advisor (CEA), V Anantha Nageswaran said. Exports is not an effective engine for growth because global trade is projected to slow and US tariffs may make it more challenging, Nageswaran said at the SBI Banking & Economics Conclave.“At this stage it is difficult to give quantifiable answers on Trump tariffs. We know that India has a bilateral trade surplus with the United States both in goods and services so there will be pressure, but some of it also work to our advantage because in some of those areas we may have to reduce some duties to be competitive as well. So I don’t think it would be necessary for us to assume that it will be negative for India and right now we don’t have orders of magnitude I don’t think we should be too exercise about various scenarios and building theoretical constructs as to how much it will impact export growth,” Nageswaran said.US is among the six countries that India has a trade surplus with. India’s trade surplus with the US was $21 billion during the first half of calendar 2024.Nageswaran said India has to anyway be prepared for slower trade with growth in Europe and China. “Exports per say may not be the most effective growth engine of India in any case because it is going to be a hard grind due to the new tariffs that may or may not come. This presidency may also be important in keeping energy prices affordable and we need that to be able to grow and generate the resources to fund our energy transition to invest in new technology and R&D, so the positives may end up being better than negatives,” he said referring to president elect Trump’s stance on forced energy transition.On pollutionNageswaran also said that India’s dual policy focus on promoting private transport and incentivising specific crops, like paddy and wheat, has significantly contributed to exacerbating air quality challenges.“The massive encouragement we have given to private modes of transport and the policies with respect to the farm sector, which have incentivised only food grains—paddy and wheat—and not other forms of agricultural products, have combined to play this role in terms of keeping our air quality somewhat on the lower side,” he said.Nominations for ET MSME Awards are now open. The last day to apply is November 30, 2024. Click here to submit your entry for any one or more of the 22 categories and stand a chance to win a prestigious award.
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