Prime Minister Narendra Modi’s chief economic advisor, V Anantha Nageswaran, believes US President Donald Trump's 50 percent tariff on Indian goods can be offset by a strong domestic demand and rising rural consumption.
According to Nageswaran, the job losses due to the impact of US tariffs will be largely confined to export-oriented units that are heavily dependent on the American market.
"There will be offsetting effects also. Yes, job loss will be contained to those export-oriented units that are very highly exposed to the United States. Second, some of them will be able to find alternative markets, and some of them may also decide to take a medium to long-term view that if the ongoing uncertainties related to the tariffs are going to be contained and temporary, they may choose to look beyond that and not necessarily let go of their workers,” Nageswaran told news agency ANI.
The advisor also pointed out that the losses due to Trump's tariffs could be compensated through a higher domestic demand due to a rising rural demand. He expressed confidence that job losses, if any, may not necessarily be significant.
{{/usCountry}}The advisor also pointed out that the losses due to Trump's tariffs could be compensated through a higher domestic demand due to a rising rural demand. He expressed confidence that job losses, if any, may not necessarily be significant.
{{/usCountry}}“But apart from that, I would also like to point out to you that there could be compensation coming from higher domestic demand. We have had a very good monsoon season. Agriculture and rural demand will be rising... So it is not necessary that job losses, if they happen, will be of a significant nature," he added.
Donald Trump's tariffs on India
US President Donald Trump announced a 25 percent baseline tariff on the import of Indian goods to the United States earlier this month. He then announced an additional 25 percent tariff on buying Russian oil amid Moscow's war with Ukraine.
The Trump administration has said that India could face secondary tariffs if New Delhi doesn't stop buying oil from Russia. The White House economic advisor, Peter Navarro, said that the road to peace in Ukraine goes through Delhi.
India has termed the tariff ‘unjustified’.