1 week ago
RBI Staff Says India Better Placed Than China on Tariffs
The United States has added a new 10% tax to many products imported from India.
The RBI staff said India may be less affected than China, Vietnam and Thailand.
This is partly because India faces a lower tariff than those countries.
Some important Indian exports, including smartphones, petroleum products and medicines, are not covered by the tariff.
India’s factories, services, exports and imports continued to perform well in July.
People in both rural and urban areas continued spending.
However, food prices may rise further, especially for rice, wheat, pulses and cooking oils.
The RBI staff said India’s strong economy could help it manage these risks.
RBI staff said India may withstand US Section 301 tariffs better than China, Vietnam and Thailand.
The United States imposed an additional 10% duty on imports from India starting July 24.
Smartphones, petroleum products and pharmaceuticals—major Indian exports to the US—remain outside the levy.
India’s economic activity, domestic demand, exports and imports remained strong in July.
CPI inflation rose to 4.45% in July, while the RBI staff warned of higher food-price risks.
- Who
- The Reserve Bank of India’s staff assessed India’s position relative to other Asian economies.
- What
- The assessment said India is better placed than China, Vietnam and Thailand to manage the US Section 301 tariffs.
- Where
- The tariffs apply to imports entering the United States, while the assessment concerns India and other Asian economies.
- When
- The additional tariffs took effect on July 24; the assessment appeared in the RBI’s August Bulletin.
- Why
- India faces a lower additional tariff, and several major Indian exports to the US are outside the levy.
Key facts
- Additional tariff on India
- 10% under the US Section 301 tariffs
- Additional tariff on China, Vietnam and Thailand
- 12.5% for each country
- Indian exports outside the levy
- Smartphones, petroleum products and pharmaceuticals
- July CPI inflation
- 4.45%, up from 4.38% in June
- RBI medium-term inflation target
- 4%
- Projected current-year average CPI inflation
- 5%
- Projected inflation peak
- 5.9% in the October-December quarter
Quotes
RBI staff
Authors of the State of the Economy article in the RBI Bulletin
“However, India’s major export commodities to the US, such as smartphones, petroleum products and pharmaceuticals, remain outside its purview. India is likely to be less affected than some of the Asian economies in the US market, such as China, Vietnam and Thailand”
financialexpress.com
“Despite these risks to global trade and the growth-inflation matrix, India’s robust macroeconomic fundamentals continue to provide a cushion to the domestic economy”
financialexpress.com
Sources
Related news
RBI Says India’s Macro Strength Cushions Global Shocks
Indian Exports to US Stay Steady Despite Tariff Pressures
India’s Growth Could Near 7% Despite Triple Economic Shock
RBI Bulletin Says India Resilient Despite Global Headwinds
India-US Trade Deal Likely to Retain Tariff Safeguard Amid Uncertainty
US Senate passes 100% tariff bill on Russian oil importers
Damaged Lohit River Bridge Cuts Off Arunachal Border Villages
Nepal Flood Exposes Delayed Alerts and Cross-Border Warning Gaps
Chinese Workers Fight Office Ageing With Parasols And Sunscreen
UPSC Key Covers SCO, Electoral Rolls, Economy, Defence and Climate
BRICS Leaders Eye Local-Currency Trade, Not Common Currency
