Trump tariff: 'Government-private sector to keep disruptions to minimum'

New Delhi: Govt and the private sector, acting in tandem and concert, to keep the disruptions to a minimum, as near-term risks to economic activity, principally exports and capital formation, remain due to tariff-related uncertainties, a finance ministry report said on Wednesday.

"If near-term economic pain is absorbed more by those, who have the ability and financial strength to do so, then small and medium enterprises in downstream industries will emerge stronger from trade imbroglio. Now is the time to demonstrate an understanding of national interest," said the ministry's monthly economic report, which comes a day after the US notified the 50% tariff on imports from India.

It said going ahead, the robust macroeconomic fundamentals continue to bolster the resilience of Indian economy. The report asserted that govt's recent policy initiatives, including setting up of a task force for next-generation reforms and forthcoming GST reforms, deregulation initiatives of the states, coupled with sovereign rating upgrade, are set to reduce borrowing costs, attract foreign capital and bolster investment and consumption.

"These reforms mark the beginning of an accelerated phase of governance transformation, ensuring that India extends its own line of progress, become more resilient, inclusive and globally competitive in an era of rising global economic self-interest," said the report.

It said while the immediate impact of recent US tariffs on Indian exports may appear limited, their secondary and tertiary effects on the economy pose challenges that must be addressed. In this context, the ongoing India-US trade negotiations will be crucial, the report pointed out.

It said planned rollout of next-generation GST reforms in coming months, with an emphasis on reducing tax burden on essential items, is expected to provide direct relief to households and boost consumption demand.