Chief Economic Advisor V Anantha Nageswaran on Wednesday stated that although the economic fallout of stringent US tariffs on Indian exports will wear off in one or two quarters, the nation needs to prepare for deeper, more long-term difficulties, calling on the private sector to take a strategic perspective.
"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 said.
Nageswaran linked the FY25 slowdown in growth—9.2 per cent in FY24 to 6.5 per cent—to "tight credit conditions and liquidity concerns," and noted that "the right agriculture policies can add 25 per cent to real GDP growth." Commenting on tariffs, he noted while industries such as gems and jewellery, shrimps, and textiles have suffered the initial setback from the 50 per cent US duties, "it is the second and third order effects.that will be harder to address."He added that the government is also cognizant of the issue and has already engaged in talks with affected sectors. "One will soon hear from the policymakers in the coming days and weeks but people have to be patient," he said.
Against the backdrop of reports of a likely India-US trade summit towards the end of this month, Nageswaran referred to the upcoming Alaska summit between US President Donald Trump and Russian President Vladimir Putin as an influential factor. Refusing to share details of negotiations, he said, "Things are very fluid at the world stage right now with relations swinging from cooperation to stalemate."
But he warned against allowing tariff disagreements overshadow "more fundamental challenges," including AI-facilitated job displacement, dependence on one nation for key minerals, and precarious supply chains. Refusing to point a finger directly at China, he cautioned, "We cannot go from crude oil import dependence to critical minerals and ladders import dependence.". Realize that crude oil (sources) at least is more diversified." He emphasized that "Indian policymakers have to decide between accepting permanent strategic dependence on rivals or devoting the resources needed for true support of independence."
Speaking to India Inc, Nageswaran asked the private sector to "do more as we navigate these longer-term challenges" and to think beyond "the next quarter." "The private sector also needs to think long term rather than the next quarter, which is perhaps where some of the challenges we are now starting to encounter may have arisen," he said.
Referring to social problems, he cautioned against "physical and health problems due to overuse of screens, high consumption of ultra-processed food," that are leading to "anxieties and even suicidal ideation among individuals," and appealed to the private sector to assist in addressing such problems.
On the economy, he indicated that consumption is "quite healthy," citing high UPI usage, although urban services data are not available. He urged caution in depending only on listed company profits to assess the economy, saying that consumption is increasingly by unlisted players. He also said overall resource mobilisation does not show any signs of slowing down with strong growth in bank credit, commercial paper issue, and IPO fund-raising.
Welcoming private capital investment in FY26, he stated the February data will consolidate the trend. On AI, he suggested "caution" in adoption, suggesting judicious selection of areas of deployment and phased integration. India, he stated, needs to generate at least "80 lakh new jobs per annum over the next 10–12 years."
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