Economic Headwinds: Global Tariffs Impacting Indian Exports

Reserve Bank Governor Sanjay Malhotra warns of economic challenges due to global tariff measures affecting growth and inflation. India's exports face negative impacts, and growth projections are lowered from 6.7% to 6.5%. The situation is compounded by the U.S. imposing reciprocal tariffs on Indian products.

Reserve Bank Governor Sanjay Malhotra raised concerns on Wednesday about the negative impact of global tariff measures on economic growth and inflation. Speaking on the ramifications for India's economy, he emphasized the detrimental effects on the country's exports during the unveiling of the bi-monthly monetary policy statement for the current financial year.

He highlighted that merchandise exports will suffer due to global uncertainties, despite services exports remaining resilient. Amidst these challenges, the RBI revised its economic growth projection down to 6.5% from an earlier estimate of 6.7%, citing global trade disruptions.

Compounding these challenges, last week the U.S. initiated reciprocal tariffs on 60 countries, including India, affecting various sectors like shrimp and gold jewellery. Malhotra noted the complexities of quantifying these impacts, given numerous trade factors and agreements, such as the proposed Foreign Trade Agreement with the USA.

(With inputs from agencies.)