‘US Tariff Impact to Dissipate’, says Chief Economic Advisor
Attributes FY25 growth slowdown to tight credit; calls for long-term thinking on challenges like AI and supply chains.
- CEA V Anantha Nageswaran predicts US tariff challenges will ease in one to two quarters.
- He urged the private sector to focus on long-term issues like AI, critical minerals, and supply chains.
- The CEA attributed the FY25 growth slowdown to tight credit and liquidity issues.
GG News Bureau
New Delhi, 13th Aug: Chief Economic Advisor V Anantha Nageswaran on Wednesday said that challenges related to US tariffs will dissipate within the next one or two quarters. He also urged the private sector to play a more proactive role in tackling longer-term challenges.
The CEA attributed India’s growth slowdown in FY25, from 9.2% in FY24 to 6.5%, to tight credit conditions and liquidity issues. He noted that while the initial impact of the tariffs on sectors like gems, jewellery, and textiles will be significant, the “second and third order impacts” will be more difficult to manage. Nageswaran confirmed that the government is aware of the situation and is engaging with the impacted sectors, asking for public patience as policymakers respond.
He warned against allowing tariff-related issues to overshadow more critical long-term challenges, including the impact of artificial intelligence, reliance on a single country for critical minerals, and the need to strengthen supply chains. He emphasized that policymakers and the private sector must work together to address these issues.
Nageswaran urged the private sector to think beyond “the next quarter” and invest more in research, particularly in areas like AI. He also raised concerns about the health of Indian youth due to excessive screen time and processed food consumption, a challenge for which he also sought the private sector’s help.
On China, the CEA called for a deeper understanding of the security dimensions of the USD 100 billion trade deficit. He stressed the need for India to diversify its import sources for critical minerals to avoid strategic dependence on a single adversary. Nageswaran also pitched for caution in the adoption of AI, stating that a deliberate approach is needed to manage labor displacement and create new jobs.
