Pvt Sector Urged To Do More As Country Navigates Through Longer-term Challenges
With speculation on whether US officials will visit India for trade talks later this month as reported, Nageswaran said the upcoming meet in Alaska between US President Donald Trump and his Russian counterpart Vladmir Putin is likely to influence the outcome
Mumbai/New Delhi: Chief economic advisor (CEA) V Anantha Nageswaran on Wednesday urged the private sector to do more as the country navigates through other longer-term challenges, including the US tariffs imposition on India, which will dissipate in the next one or two quarters.
“It is the second and third order impacts, which will flow once sectors like gems and jewellery, shrimps and textiles have taken the first order brunt, that will be ‘more difficult’ to tackle,” the CEA said in an event in Mumbai.
Attributing the growth slowdown in FY25 with a deceleration to 6.5 per cent from FY24's 9.2 per cent, he said it may have tight credit conditions and liquidity issues. “The right agriculture policies can add 25 per cent to real GDP growth,” Nageswaran said.
The CEA also pointed out that the government is aware of the situation and conversations with the impacted sectors have already begun. “One will hear from the policymakers in the coming days and weeks but people have to be patient,” he said.
With speculation on whether US officials will visit India for trade talks later this month as reported, Nageswaran said the upcoming meet in Alaska between US President Donald Trump and his Russian counterpart Vladmir Putin is likely to influence the outcome.
Nageswaran also said that things are very fluid at the world stage right now with relations swinging from cooperation to stalemate, and spelled out his expectation of the impact of 50 per cent US tariff on Indian exports. “I do believe that the current situation will ease out in a quarter or two. I don't think that from a long-term picture, the India impact will be that significant but in the short run, there will be some impact,” he said.
The CEA further said that no one could guess the exact reasons why President Donald Trump chose to slap the high tariffs on India, wondering if it's the fallout of Operation Sindoor or something even more strategic.
“The focus on tariff-related issues should not blind us to more important challenges, including the impact of artificial intelligence, reliance on one country for critical minerals, and their processing and strengthening of supply chains,” he added.
He also welcomed the capital expenditure put in by the private sector in FY26 and data to be released in February next year will attest to the same. “The consumption story is quite healthy as per the data on UPI usage," he said.
"However, on urban consumption, there is no proper data source to capture services consumption. Drawing from listed companies' earnings may also not be the right measure as consumption is moving to the unlisted space,” he added.
