Chief Economic Advisor V. Anantha Nageswaran on Wednesday (August 13, 2025) stated U.S. tariffs-related challenges will dissipate within the subsequent one or two quarters, and urged the personal sector to do more because the nation navigates via different longer-term challenges.
He attributed the expansion slowdown in FY25, which noticed a deceleration to 6.5 per cent from FY24’s 9.2 per cent, to tight credit score situations and liquidity points. The proper agriculture insurance policies can add 25 per cent to actual GDP development, Mr. Nageswaran added.
On the U.S. tariffs, the CEA stated it’s the second and third order impacts, which is able to move as soon as sectors like gems and jewelry, shrimps and textiles have taken the primary order brunt, that will probably be “more difficult” to sort out.
The authorities is conscious of the scenario and conversations with the impacted sectors have already begun, Mr. Nageswaran stated, including that one will hear from the policymakers within the coming days and weeks however individuals have to be affected person.
With hypothesis on whether or not U.S. officers will go to India for commerce talks later this month as reported, Mr. Nageswaran stated the upcoming meet in Alaska between U.S. President Donald Trump and his Russian counterpart Vladmir Putin is probably going to affect the result.
Declining to spell out any particulars on the commerce negotiations between India and the U.S., the academic-turned-advisor stated issues are very fluid on the world stage proper now with relations swinging from cooperation to stalemate, and spelled out his expectation of the impact of fifty 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 stated.
He stated nobody can guess the precise explanation why President Donald Trump selected to slap the excessive tariffs on India, questioning if it is the fallout of Operation Sindoor or one thing even more strategic.
However, the CEA stated the concentrate on tariff-related points ought to not blind us to more “important challenges”, together with the impact of synthetic intelligence, reliance on one nation for vital minerals, and their processing and strengthening of provide chains.
Mr. Nageswaran exhorted the personal sector to do more “as we navigate these longer-term challenges, promising that public policy will play the facilitator’s role”.
“Private sector also has a lot of thinking to do, given the massive strategic challenges we face in the coming years… the private sector also has to think about the long-term rather than the next quarter, which is what might have led to many of the challenges we are currently beginning to face,” he stated within the feedback aimed toward India Inc.
He, nonetheless, did not elaborate on the topic any additional.
Stating that the federal government has allotted cash in the direction of the analysis functions, he stated it’s now for the personal sector to up their investments within the space.
The Indian youth is looking at each bodily and well being well being points arising from extra display screen use, consumption of extremely processed meals, and so forth, which is main to anxieties and even suicidal ideas amongst individuals, the CEA stated, searching for the personal sector’s assist to sort out the problem.
He welcomed the capital expenditure put in by the personal sector in FY26 and information to be launched in February subsequent 12 months will attest to the identical.
The consumption story is “quite healthy”, the CEA stated, pointing to the information on UPI utilization. Specifically on city consumption, he rued that there isn’t any correct information supply to seize providers consumption, and added that drawing from listed firms’ earnings may not be the proper measure as consumption is shifting to the unlisted house.
The total useful resource mobilisation within the financial system is not exhibiting any slackening, the CEA stated, asking all to take a look at banks credit score development, industrial paper issuances, and IPO fundraising collectively.
On China
On China, Mr. Nageswaran stated “we also need to understand the security dimension and look at the $100 billion trade deficit beyond just the number”. As an answer, there’s a want to diversify the sources of imports and the CEA harassed that the personal sector could have a task to play there.
Without naming China, he stated just one nation provides vital minerals, that are important for semiconductors, synthetic intelligence tech, and added that the availability is “critically unstable”.
“We cannot go from crude oil import dependence to critical minerals and ladders import dependence. Understand that crude oil (sources) at least is more diversified,” he stated.
“Indian policy makers must choose between accepting permanent strategic dependence on adversaries or committing the resources necessary for genuine support to independence,” Nageswaran stated.
Stating that AI will trigger labour displacement, Nageswaran pitched for warning in AI adoption and added that “we will have to choose the areas in which we allow AI to be deployed and harnessed, and also the speed with which we do so”.
There is a necessity to create no less than 80 lakh new jobs each year within the subsequent 10-12 years, he added.
