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Impact of US tariffs not to last more than two quarters: CEA
Aug-14-2025

The Chief Economic Advisor (CEA) V Anantha Nageswaran has said that US tariffs-related challenges will dissipate in the next one or two quarters. He also urged the private sector to do more as the country navigates through other longer-term challenges. Meanwhile, he attributed the growth slowdown in FY25, which saw a deceleration to 6.5 percent from FY24's 9.2 percent, to tight credit conditions and liquidity issues. Further, he suggested that the right agriculture policies can add 25 percent to real GDP growth.

On US tariffs, he said that it is the second and third order impacts, which will flow once sectors like gems and jewellery, shrimps and textiles have taken the first order brunt, that will be more difficult to tackle. Meanwhile, he assured that the government is aware of the situation and is in conversations with the impacted sectors. He hinted that things are very fluid at the world stage with relations swinging from cooperation to stalemate. 

On China, he emphasised the need to understand the security dimension and raised concerns about $100 billion trade deficit with China. As a solution, he suggested that there is a need to diversify the sources of imports and the private sector will have a role to play there. Meanwhile, stating that AI will cause labour displacement, he pitched for caution 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’. He added that there is a need to create at least 80 lakh new jobs per annum in the next 10 to 12 years.

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