According to Sameer Narang, Chief Economist at Bank of Baroda (BoB), India’s economy has been shielded from the impact of tariffs due to strong domestic demand. Narang stated that the country’s growth story is largely driven by domestic factors, including consumption and investment, which have helped mitigate the effects of global trade tensions.
The ongoing trade tensions between the US and China have led to an increase in tariffs, affecting global trade and economic growth. However, India’s economy has shown resilience, with the country’s GDP growth rate remaining relatively stable. Narang attributed this to the strong domestic demand, which has helped offset the negative impact of tariffs on the economy.
Narang also pointed out that India’s economy is less dependent on exports compared to other emerging markets. This has helped the country to navigate the challenges posed by global trade tensions. Additionally, the government’s efforts to boost domestic consumption and investment have also contributed to the economy’s resilience.
The Chief Economist also highlighted the importance of monetary policy in supporting economic growth. He noted that the Reserve Bank of India (RBI) has taken steps to ease monetary policy, which has helped to stimulate growth. The RBI has cut interest rates several times in recent months, making borrowing cheaper and increasing liquidity in the system.
Furthermore, Narang emphasized the need for structural reforms to support long-term economic growth. He stated that the government needs to focus on implementing reforms that improve the business environment, increase competitiveness, and attract foreign investment. This would help to boost economic growth and make the economy more resilient to external shocks.
Overall, Narang’s comments suggest that India’s economy is well-positioned to weather the challenges posed by global trade tensions. The strong domestic demand, supportive monetary policy, and efforts to boost consumption and investment have all contributed to the economy’s resilience. However, the need for structural reforms remains, and the government must continue to work towards implementing policies that support long-term economic growth.
The Indian economy has been shielded from the impact of tariffs due to strong domestic demand, and the government’s efforts to boost consumption and investment have contributed to the economy’s resilience. With the right policies and reforms, India can continue to navigate the challenges posed by global trade tensions and achieve long-term economic growth. The country’s growth story is largely driven by domestic factors, and the economy is less dependent on exports compared to other emerging markets.