Prime Minister Narendra Modi’s strong relationships with major world economies will help India navigate potential “negative impacts” from global trade shifts under a Donald Trump presidency, a top government official said, as per Bloomberg.
This assertion comes as the Indian government actively explores various strategies, from potential trade deals to tariff reductions, to mitigate the impact of Trump’s anticipated trade policies.
Speaking to reporters, the official, whose name was not released by the source, emphasized the government’s confidence in India’s ability to withstand potential trade disruptions. This confidence, he indicated, stems from the deep ties Prime Minister Modi has cultivated with world leaders and economies.
The Indian government is currently assessing various options to appease the Trump administration. This includes exploring a potential trade agreement or offering selective tariff cuts in an effort to avoid the harshest consequences of the US president’s policies. While the official declined to specify which products India might consider reducing duties on, they stressed that “all discussions will happen taking into account the holistic needs of both the countries.”
Trump’s rhetoric during his first days back in office has raised concerns about potential trade barriers. He has proposed a 25% tariff on goods from Mexico and Canada, as well as a 10% hike on Chinese imports. Additionally, he has threatened to increase tariffs on nations within the European Union and the BRICS group of developing economies.
When questioned about whether India’s burgeoning electronics sector might be jeopardized by Trump’s potential disruption of global supply chains, the official acknowledged the possibility.
Addressing India’s current economic slowdown, the official stated that the country aims for a growth rate between 6% and 8% over the next two years. He acknowledged the likelihood of “cyclical variations” throughout those quarters, highlighting the complexities of the economic landscape. India is facing its weakest economic growth since the pandemic in the fiscal year concluding in March, as reduced spending by urban consumers due to wage declines and high inflation takes its toll.
