'Trump tariffs pose low risk of job losses, but...': CEA Anantha Nageswaran cautions

Chief Economic Adviser V Anantha Nageswaran

V Anantha Nageswaran, the Chief Economic Advisor (CEA) to the Prime Minister, noted that robust domestic demand, aided by a good monsoon and string rural consumption, may help to negate the impact of US tariffs, with job losses largely confined to export-oriented units that are heavily dependent on the American market.

Speaking to news agency ANI, Nageswaran observed that any job losses that do occur due to the additional tariff measures are unlikely to be significant. However, the CEA cautioned that the upcoming quarters could see some impact, particularly on the external sector, due to tariffs affecting export growth, which might spill over into domestic production and capital formation.

The renowned economist said that he sees several "silver linings" in the Indian economy that offset the impact of external demand on the country due to US tariffs.

Nageswaran backed his argument by stating that the measures taken by the government, such as direct tax cuts, forthcoming GST structure reforms, and the employment-linked incentives, among others, are supportive of the overall economy.

The top economist also noted that some of these firms could explore alternative markets, while others might take a medium-to long-term view, choosing to retain workers if the tariff-related uncertainties proved temporary.

Commenting on India's 7.8 per cent GDP growth rate in Q1 2026, Nageswaran said that India’s strong GDP performance was driven by robust growth in manufacturing and services, along with government consumption, which had been negative in the first quarter of the previous year but benefited this time from a favourable base effect and added that a lower GDP deflator, reflecting easing inflation, also supported the figures.