By Safe Investment August 28, 2025
The Finance Ministry has said that the short-term impact of US tariffs on exports may be limited. If the government and the private sector work together, the impact can be limited significantly. It has also said that such shocks make us stronger and more agile.
The government has made a big statement about the impact of America's 50 percent tariff. On August 27, the Finance Ministry said that the growth of the global economy is expected to decrease, due to which commodity prices may remain under control. This will compensate to some extent the loss caused by the American tariff. However, the ministry said that the risk to India's growth will reduce only when the talks with the US continue regarding the deal.
The Finance Ministry released the Monthly Economic Review on June 27
The Finance Ministry has told many important things about the economy in the Monthly Economic Review of July. It has said that the short-term impact of the American tariff on exports may be limited. But, it can have a more secondary effect on the economy. This needs to be paid attention to. It has said that for this, the talks with the US regarding trade are very important. The US delegation was going to come to India for talks at the end of this month. But, later its program was cancelled.
Government and private sector can try together
The Finance Ministry believes that there is uncertainty about the impact of US tariffs on economic activities, especially exports and capital formation. But, if the government and private sector try together, the impact can be limited to a great extent. It has also said that such shocks make us strong and agile. If the short-term impact is handled by large companies that have financial strength and capability, then small and medium companies can emerge stronger from this crisis.
Government's focus on trade agreements with many countries
The Finance Ministry has said that India is using a diversified trade strategy in view of the diversification and changes in strategy at the global level. This can keep the trade performance better. This includes the free-trade agreements done recently with many countries. India has recently signed such an agreement with the UK. Talks are going on for free-trade agreements with the US, EU, New Zealand, Chile and Peru. But, it will take time for the results of these efforts to come. Also, this will not be able to fully compensate for the decline in exports to the US.
Conditions are favorable on the domestic front
The government believes that many things are looking better on the domestic front. Monsoon rains have been above average. Retail inflation is expected to remain under control in the future as well. There is stability in crude oil prices. This may keep grain prices soft. The government is trying to reduce the risk by increasing domestic capacity, increasing exports and diversification in the supply chain. Alternative sources of imports are being explored. Focus is being increased on reforms to increase economic growth. For this, the government has formed a task force, which will give suggestions about the next generation reforms.
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