India to overcome impact from Trump's trade policies, says Ashwini Vaishnaw

While Vaishnaw did not give details of which products the govt would be open to reducing duties on, he said all discussions will happen taking into account the holistic needs of both the countries

By Swati Gupta

 

Prime Minister Narendra Modi’s relationship with the world’s biggest economies will help India overcome any “negative impacts” from shifts in global trade under President Donald Trump, a top official said on Wednesday. 

 

“It has been very clear that the entire world looks at India as a trusted country,” said Ashwini Vaishnaw, India’s electronics and technology minister in an interview with Bloomberg’s Menaka Doshi in Davos. “I will say that trust will outweigh any of the negative impacts.”

 

His comments come at a time when the Indian government is evaluating options ranging from a trade deal to tariff cuts in an effort to appease the Trump administration and avoid the brunt of his policies.

 

“All discussions on commerce - what we sell and what we buy- they are already happening,” the minister said. While Vaishnaw did not give details of which products the government would be open to reducing duties on, he said “all discussions will happen taking into account the holistic needs of both the countries.”

 

In his first few days in office, Trump said he would slap a 25 per cent tariff on Mexico and Canada and hike duties on China by 10 per cent. He also threatened countries in the European Union and Brics group of developing nations with increased tariffs.

 

When asked if India’s growing electronics sector will be threatened by Trump’s disruption of global supply chains, the minister said “if such changes happen, we will have to calibrate our entire policy, our entire structure.” 

 

India’s growth 

On India’s weak economic expansion, Vaishnaw said that the country is targeting a growth rate between 6 per cent to 8 per cent over the next two years, adding that there will be “cyclical variations” over some quarters. 

 

The nation is expected to log its weakest growth since the pandemic in the fiscal year ending in March, as urban buyers cut back on spending after wages declined and inflation spiked. 

 

Vaishnaw said the government’s capital spending of Rs 11 trillion ($127 billion) is “reasonably high.” That along with a revival of private investment will boost growth, he added.