India-US trade deal lifts great deal of uncertainty, say FinMin officials

The India-US trade deal has lifted the veil of uncertainty on the country’s economy and is expected to create more opportunities for India’s labour-intensive and manufacturing sectors, top finance ministry officials said on Tuesday.

 

Department of financial services (DFS) secretary M Nagaraju said: “Dark clouds of uncertainty had lifted from the world economy and industry should now cheer up and heave a sigh of relief.”

 

Speaking at a Ficci event, he said, “It is a good deal and will benefit exporters.”

 

Referring to the highly-anticipated India-US trade deal, Anuradha Thakur, department of economic affairs (DEA) secretary, said a great deal of uncertainty had come down this morning.

 

She said that even though the Budget was prepared keeping in mind the situation that existed then, the government is looking forward to greater buoyancy.

 

“The Budget math is transparent and we are committed to achieving the debt-to- gross domestic product (GDP) glide path,” Thakur added, speaking at the same event.

 

Revenue secretary Arvind Shrivastava, in a statement, said that the trade deal will further expand and deepen trade between two of the largest economies of the world.

 

He added, “It will create more opportunities for our labour-intensive and manufacturing sectors in the US market and give impetus to mutually-beneficial collaboration in high and advanced technology sectors.”

 

India and the US agreed on a historic trade deal on Monday under which the US will reduce tariffs from 50 per cent to 18 per cent.

 

On the impact of the deal on GDP growth of the country, Thakur said, “I will wait for things to unfold. Very constructive dialogue has been going on, which has resulted in this development. Let us await the details and that will help us see how it will happen.”

 

The Economic Survey has forecast a GDP growth rate in the range of 6.8-7.2 per cent in FY27 without factoring in the India-US trade deal.

 

“We all work in global systems which are interconnected. In that, India stands out as a macro-economically strong country in the world today. Going forward, we would like to continue with consistency and commitment on the path that was undertaken 10-12 years back,” Thakur added.

 

The DEA secretary also said the combined target of disinvestment and asset monetisation of ₹80,000 crore in the Budget is likely to be exceeded.

 

“This target cannot be singularly achieved with one thing. It is a mix of both disinvestment and asset monetisation. We are hopeful of exceeding the target,” she said.

 

Thakur said, given the momentum, there is likely to be an uptick on the receipts side.

 

Speaking at the event, the DFS secretary said the banking sector's credit growth was not adequate yet to meet the Viksit Bharat vision of 2047.

 

He said a high-level expert committee for the banking sector, proposed in the Budget, will take into account the issue and recommend measures to improve the banking sector and credit growth.

 

“The government will soon set up the panel and detail its terms of reference,” he added.