Kaushik Basu Critiques US Reciprocal Tariffs: Economic Implications Unveiled

Kaushik Basu, former World Bank Chief Economist, critiqued the US tariffs on India, highlighting their detrimental impact on the US economy rather than India. He urges India to avoid tariff retaliation and instead enhance trade with other nations. Basu sees potential long-term opportunities for India amidst these trade challenges.

Kaushik Basu, the former Chief Economist at the World Bank, has described the US-imposed tariffs on India as 'baffling' and more damaging to the US than to India. Under the Trump administration, tariffs have been increased to 26% on Indian goods, sparking debates on economic impact.

Basu argues that these measures, based on trade deficits, undermine confidence in the US dollar. He suggests India should mirror strategies adopted by Europe, Canada, and China by fostering intra-regional trade rather than escalating tensions with retaliatory tariffs.

This scenario, while challenging in the short term, could become a growth opportunity for India by enhancing its trade ties with other global leaders like China. India, already excelling in technology and pharmaceuticals, could leverage these policies to boost its economic profile.

(With inputs from agencies.)