CEA Sees No Long-Term Tariff Hit, But Govt Rushes to Cushion Blow

India does not expect the impact from US tariffs to last long, but the government is taking no chances -- it is working to assist exporters, ease tax refunds and ease the compliance regime.

- Dhirendra Kumar & Agencies

Economic challenges from US tariffs may dissipate in a quarter or two, chief economic advisor V. Anantha Nageswaran said on Wednesday, urging the private sector to do more as the country navigates other longer-term challenges.

"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.

It is the second and third order impacts of tariffs, 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, Nageswaran said in Mumbai. The government is aware of the situation and conversations with the impacted sectors have begun, Nageswaran said, adding that one will hear from the policymakers in the coming days and weeks.

As the Trump tariffs land India in uncharted waters, the government has stepped up.

The commerce ministry has submitted a package to support exporters to the finance ministry, a top official said on the condition of anonymity. The package is designed to give exporters a combination of incentives, policy support and targeted interventions to help them overcome the volatility in global trade.