The government has given a big statement about the impact of 50 percent of the US tariffs. On August 27, the Finance Ministry said that the growth of global economy is expected to decrease, causing commodity prices to remain under control. This will replenish the damage caused by American tariffs to some extent. However, the ministry said that the risk for India’s growth will decrease only when talks with America will continue.
Finance Ministry released monthly Economic Review on 27 June
The Finance Ministry has told many important things about the economy in the monthly Economic Review of July. He has said that the impact of American tariff in short term on exports may be limited. However, it can have a more secondary effect on the economy. This needs to be noted. He has said that for this, the conversation related to trade with America is very important. The US delegation was scheduled to visit India at the end of this month. However, his program was later canceled.
Government and private sector can try together
The Finance Ministry believes that there is uncertainty about the impact of the US tariff on economic activities, especially exports and capital formation. However, if the government and private sector try together, then the effect can be greatly limited. He has also said that such shocks make us strong and agile. If such large companies manage the effect in short term, which have financial strength and ability, then small and medium companies can emerge as powerful from this crisis.
Government focus on trade agreement with many countries
The Finance Ministry has reported that India is using diversified trade strategy in view of the global diversification and changes in strategy. This can make the performance of trade better. This includes a recent free-trade agreement with many countries. India has recently made such an agreement with the UK. The US, EU, New Zealand, Chile and Peru are in talks for the free-trade agreement. However, it will take time for these efforts to come. Also, this will not make the complete compensation of the decline in export to America.
Conditions on domestic front favorable
The government believes that many things are looking better on the domestic front. The monsoon rains have been higher than the average. Retail inflation is expected to be under control even further. Crude oil prices are stable. This can keep the prices of grain soft. The government is trying to reduce the risk through increase in domestic capacity, increase in exports and diversification in supply chains. Alternative sources of imports are being discovered. The focus on reforms is being increased to increase economic growth. For this, the government has made a task force, which will suggest the reforms of the next generation.
Economy’s growth expected to remain good
The Finance Ministry is expected to keep India’s growth well. He has said that inflation is under control. The rating agency S&P has increased India’s sovereign rating to BBB. Here, the government has increased the focus on capital expenditure. The government is going to reform a big reform in GST. Business rules are also being made easier at the state level. With this, the growth of Indian economy is likely to be better. The ministry also says that the Economic activity remained strong in July.