"Generational chance of export-led growth"

Sajid Z. Chinoy, MD and Chief India Economist at JPMorgan, on the economic outlook for India and the world

- BY SIDDHARTH ZARABI

NOTED ECONOMIST Sajid Z. Chinoy, Managing Director and Chief India Economist at JPMorgan, feels no matter what progress the US makes on trade deals, the global economy will experience some pain. Edited excerpts:

What is your reading of the trade situation, given that India is in talks with the US?

I think there are always opportunities in a crisis, and that's what we're seeing from the broader global standpoint. It is transformational in the sense that we're seeing supply chains getting rejigged like they haven't been in 20 or 30 years. The global economy went into this trade turmoil on a relatively sound footing, despite all the noise around the US economy contracting in the first quarter. But I think we should not underestimate what both the near-term hit to global growth is going to be, as well as the medium-term opportunity for India. There’s a lot of expectation that the US will sign bilateral deals with many countries and large trading partners.

I think India is on a very good footing. Even if the US were to succeed at many of these trade negotiations, we're still looking at a universal tariff of 10%, and sectoral tariffs on aluminium, steel, and auto. Our sense is this sets up the US for a recession in the second half of 2024. The fact is these deals are going to take several months or quarters to be completed. Until then, there’s most likely going to be an investment freeze around the world. So, in the near term, we should brace ourselves for a pretty sharp slowing of global growth.

"FOR INDIA TO STAND OUT, WE HAVE TO BE A BEACON OF STABILITY, CONSISTENCY, AND REFORM"