Trade war
US President Donald Trump has announced a heavy tariff on most countries around the world including India. In response, other countries of the world have started announcing to increase the fee on American goods. However, India has not given any response yet. Meanwhile, economists have said that increasing the fee by the US does not have the risk of increasing inflation and employment in India. This can affect countries more primarily trading with the US under the status of the most preferred nation (MFN). India has the opportunity to increase its presence in the global market at a more competitive price. The reason for this is to reduce the fees levied on India compared to countries like Bangladesh, Sri Lanka and Vietnam.
Effect to assess the hasty
Prof. Sachin Chaturvedi, Director General of RIS (Research and Information System of Developing countries), iconic research institutes about the impact on the economy of US fee, said, “It is too early to assess its full impact on both global and Indian economies, as these trade measures are still developing.” India has been actively synergy with this new business reality. This can affect countries more primarily trading with the US under the status of the most preferred nation (MFN). “He said,” However, the charge of America is least the risk of increasing inflation and employment in the Indian domestic market. India’s total export to the US is $ 75.9 billion. Out of this, there will be a stable demand in major areas such as pharmaceutical (eight billion $), cloth ($ 9.3 billion) and electronics ($ 10 billion). ‘
India charged 26 percent
Chaturvedi said, “The important thing is that the drug sector is important in the exported areas to the US and is placed in the category of discount. In addition, India has been charged 26 percent, which has comparatively fee benefits compared to competitive countries like Bangladesh (37 percent counter -fee), Sri Lanka (44 percent) and Vietnam (46 percent). Therefore, India has the opportunity to expand its market appearance at a more competitive price. ”Prof. NR Bhanumurthy, noted economist and director of Madras School of Economics, said,“ Things are still developing and will have to see if a country will also reply. China has taken steps in this direction and Canada has imposed retaliation some time ago. In this context, it is difficult to assess the effects on the economy at this time. “He said,” However, it is certain that inflation will increase in the US in the short term. Some people are predicting recession in America. The Federal Reserve has already stated that inflation may increase and may have to give up the trend of liberal monetary policy launched in late 2024. But we have to wait to see how much it will have on global growth and inflation.
India in good condition to take advantage
In response to another question, Chaturvedi, who is also holding the responsibility of a member of the board of directors, said, “India is in a good position to benefit from the changing business scenario rather than losing jobs.” After the Indian Prime Minister’s visit to America, a bilateral trade agreement (BTA) was announced, which would streamlines trade policies and promote economic cooperation. Additionally, American participation in the India-West Asia-Europe Economic Corridor (IMEC) creates new opportunities for India. “He said,” there is a reward of both employment, domestic demand and export. Since India has either been exempted from fees to major areas exported to the US from India or the fee hike is lower than in competitive countries. In such a situation, there is no possibility of people’s jobs in India. Instead, India can gain competitive lead in these industries. ”
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