RBI Former Governor of Raghuram Rajan has termed the reciperook tariff on about 60 countries by US President Donald Trump as a self -goal. He also said that this will have less impact on India. Rajan believes that this move of Trump administration ‘upside down’ and eventually will harm the US economy. They argue that imposing tariffs will increase prices for American consumers, which will reduce demand and affect economic growth.
India will have less effect
According to Rajan, the effect of this tariff on India will be ‘less’. The reason for this is that the US has imposed tariffs on many countries, which will provide some relief to Indian exporters, as American consumers will have limited options.
Inflation will not increase in India
Rajan believes that American tariffs on India will not increase inflation, as India will export less, which will increase the availability of goods in the domestic market.
Opportunities for India
Rajan has suggested that India should reduce its tariffs, which can help him to reduce American tariffs. At the same time, India needs to strengthen its business relations with ASEAN, Japan, Africa and other countries of Europe. Rajan said that it is also important to establish a relationship with China and make strong relations with neighboring countries.
Regional cooperation
Rajan has insisted on increasing cooperation with regional organizations such as South Asian Regional Cooperation Organization (SAARS). He said that as the world is divided into regional groups, South Asia should not remain isolated.
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