By Banikinkar Pattanayak
Copyright indiatimes
ET Onlineimpact of US tariff
New Delhi: The Prime Minister’s Office (PMO) has reached out to large corporations, seeking their inputs on blunting the impact of the additional US tariff on most Indian goods, given their crucial role in supply chains and business expertise, people aware of the development said.In a meeting with senior executives of about 15 large companies-including those from Tata Group and Reliance Group-last month, Shaktikanta Das, principal secretary-2 to Prime Minister Narendra Modi, also deliberated with them on ushering in next-generation reforms, the people told ET.The reforms are aimed at pulling all domestic economic levers to catapult India into a higher growth orbit amid mounting external headwinds.”The objective of the meeting was to seek feedback on where the obstacles are and what the government can do, together with industry, to ensure that the economy is least impacted by what’s going on globally,” said a senior government official.”It was one of the proactive steps by the PMO to ensure we act fast to better protect our businesses from external challenges through internal reforms.” From the ramparts of the Red Fort, Modi had on August 15 announced the launch of Goods and Services Tax 2.0 and formation of a task force that will evaluate extant laws and regulations for an overhaul, among other steps, as part of efforts to undertake the next-generation of reforms.Live EventsSubsequently, the prime minister huddled with his top Cabinet colleagues, advisors and officials to deliberate on a road map to fast-track reforms.Some analysts and agencies have forecast a 0.3- to 0.8-percentage-point hit to the economy due to the extra 50% US tariff that is expected to impact 55% of Indian exports to that country.Chief economic advisor V Anantha Nageswaran has said the beneficial impact of the planned GST cuts from September 22 would limit the tariff-induced damage to about 0.3 percentage point of gross domestic product this fiscal. Both the countries are currently engaged in negotiations to hammer out a trade deal.The US is India’s biggest market, having accounted for a fifth of its total merchandise exports of $437 billion in FY25.Streamlining processes, export facilitationPrior to the meeting with large companies, the PMO had asked the finance ministry to form an inter-ministerial panel to review tax and export clearance processes to spur manufacturing and improve the competitiveness of domestic businesses, said another official. The panel, with representations from the ministries of finance, commerce & industry and the Reserve Bank of India, is assessing hurdles in various customs processes and facilitation and in extending support to exporters, he said.It would also identify sector-specific bottlenecks in key sectors, including electronics and engineering goods, and suggest necessary steps. It will submit its report in two months.The move follows the government’s plan to embark on an aggressive export diversification bid amid the US tariff woes.ET BureauMeanwhile, a team led by assistant US trade representative for South and Central Asia Brendan Lynch visited New Delhi on Tuesday to hold talks with senior Indian commerce ministry officials.The talks were “positive and forward-looking, covering various aspects of the trade deal”, according to an official statement. Both sides decided to “intensify efforts to achieve early conclusion of a mutually-beneficial trade agreement”.Add as a Reliable and Trusted News Source Add Now!
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