Don't Consider US Tariffs In India's GDP Forecast: Neelkanth Mishra, Chief Economist At Axis Bank

Reducing the US President Donald Trump's tariff play to nothing more than fear tactics, Neelkanth Mishra, Chief Economist at Axis Bank, said it's not worth incorporating US tariffs in the Indian gross domestic product (GDP) forecast.

He noted that, "Indian entrepreneurs are a hardy lot. If you can't sell here, you could sell somewhere else. So trade diversion is the oldest trick in the trade, you may have 1 or 2% lower margins. I'm sure there is an impact, there's some business impact, but in a $4-plus trillion dollar economy it is not something that is worth modeling in."

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While Trump's tariff tactics have disrupted international trade, the impact on India, when you start considering the losses is that “there is no strategic break between the US and India,” as per the top economist at Axis Bank.

The visible signals lie in public meetings “between the Intel CEO and PM Modi, Microsoft CEO, and even Trump Junior's visit to India”. They are indicative of "no hard-break, strategic break, between India and the US, and which, frankly, is all that matters".

Should India Offer Concessions To US Ahead Of SC Verdict On Trump Tariffs?

While the negotiations between India and the US are yet to arrive on a conclusion, several wait with bated breath over the US Supreme Court's decision on Trump tariffs.  

"The constitutionality of the reciprocal tariffs is now imminent," Mishra said, while raising a pertinent query that  it would prove unwise to "give concessions a few weeks before the Supreme Court is going to rule them as constitutional."

Meanwhile, Trump recently took to social media penning, "India is home to one of the world’s oldest civilizations. It is an amazing country and an important strategic partner for America in the Indo-Pacific region. We have a great friend in PM Modi." 

On the other hand, reports are claiming that India stands firms on not opening up its market for American agricultural products, however, the south Asian economy remains open to exploring strategic areas like LNG, defence, and clean energy.