Govt working overtime to cushion export sectors against US tariff: CEA Anantha Nageswaran

Chief Economic Adviser V Anantha Nageswaran (Courtesy: PTI photo)

Chief Economic Advisor (CEA) Anantha Nageswaran on Saturday said the central government, along with various stakeholders, are actively working overtime to cushion export sectors in view of the recent imposition of an additional 25 per cent tariff by the United States.

The US has imposed a steep 50 per cent tariff on Indian goods entering America from August 27.

Nageswaran highlighted that crises, whether minor or major, often act as catalysts, providing focus and purpose for all segments of society—including the government, private sector, and households—to undertake necessary actions that might otherwise have been delayed.

Since the tariffs took effect, "Conversations have been happening in the last three to four days", involving various exporting and representative bodies, private sector export promotion agencies, and the ministry, he said.

Nageswaran, speaking virtually at ICC organised event, said that the ministries and the Ministry of Finance are "working overtime" to formulate a strategy.

The primary goal of this response, he said, is to provide both a "time cushion" and a "financial cushion" for the affected export sectors and units.

This support aims to help them "weather the present storm and also emerge from it stronger".

While acknowledging these developments, the CEA added, he was not in a position to disclose further details on the government's plan.

Despite the challenges posed by the tariffs, Nageswaran also highlighted "silver linings" in the broader economic landscape.

He referred to the first-quarter GDP numbers for the current financial year, recently released by the Ministry of Statistics. The real GDP growth rate (GDP at constant prices) increased by 7.8 per cent year-on-year, compared to the first quarter of the previous financial year (2024-25), with the lower GDP deflator playing a role in boosting the figure.

Furthermore, he noted that the nominal GDP growth (GDP at current prices) rose by 8.8 per cent from a year ago.

This nominal growth was particularly gratifying, as some private sector economists had feared it would only reach around 8 to 8.2 per cent, making its near 9 per cent performance an "important thing to note".