India Inc says the story is not over yet and that everything will work out well as India and the US have good relations. Central bank unlikely to cut rates till December to boost growth, according to experts
There will be an incremental impact of the tariffs, particularly on clothing/textiles, jewellery and phones sectors
Image: Indranil Mukherjee / AFP
Corporate India believes that US President Donald Trump's announcement to impose 25 percent tariff on goods imported from India is transitionary and clarity could emerge in the coming weeks, considering that a trade deal between the two countries is expected to be signed soon.
Mahindra Group’s chief executive and MD Anish Shah says the “story is not over as yet”. “The two countries [US and India] have good relations. Everything will work out well,” he told CNBC TV18 on Thursday. On a case for a renegotiation of tariff, he added, “We are still a little way from the end stage, so I’m positive that things will work out well.”
There will be an incremental impact of the tariffs, particularly on jewellery, clothing/textiles and phones sectors, according to an impact note on tariffs issued by Axis Bank’s chief economist Neelkanth Mishra. By Thursday’s closing, steel and pharmaceutical stocks were the hardest hit.
The tariff announcement has probably come at the wrong time for India. India Inc’s Q1 June-ended revenue growth has been largely muted—Crisil Research has pegged it at just 4 percent to 6 percent—and there is little clarity whether local consumption demand will pick up in the upcoming festive season, with credit growth at a three-year-low.
Economists Forbes India spoke to are ruling out chances of the Reserve Bank of India (RBI) considering more rate cuts to boost economic growth. In fact, we may not see any rate action until December, they said.