US Court Obstructs Trump’s Tariffs: CEA Nageswaran Claims ‘India Sees Some Positive Aspects’
Optimism for India’s Economy Amid US Trade Court Ruling
V. Anantha Nageswaran, the Chief Economic Adviser for the Government of India, has pointed out that there are several positive developments for India, particularly following a ruling from the US trade court that has halted President Donald Trump’s reciprocal tariffs. The US trade court’s decision prevents these tariffs from being enacted, which Nageswaran views as beneficial.
Speaking at the CII Annual Business Summit, Anantha Nageswaran noted, “There will be certain sectors that could benefit India in light of this tariff situation.” He highlighted that decreasing energy prices and the lifting of punitive tariffs present fresh opportunities for Indian exporters. The recent ruling determined that President Trump had exceeded his authority by trying to impose generalized duties on imports from countries that sell more to the U.S. than they purchase.
In explaining the court’s findings, a panel of three judges stated, “The court does not assess the wisdom or probable efficacy of the President’s tariff strategy. Such usage is deemed impermissible not due to its rationality or effectiveness, but because federal law prohibits it.”
In response to this legal development, Nageswaran believes it symbolizes a potential chance for the country, aligning with India’s broader economic objectives for FY26. “Regardless of how the tariff landscape evolves after the 90-day period following the liberation day, or the 90 days allotted to China, there will be sectors where India lacked an advantage previously, while some sectors may now benefit from the tariffs,” he explained.
Additionally, the wider macroeconomic environment fosters cautious optimism, as noted by Nageswaran. He mentioned that “monetary policy appears less restrictive in comparison to 2024,” citing a more stable interest rate climate along with manageable levels of inflation. It is significant to mention that following the MPC’s meeting in April, RBI Governor Sanjay Malhotra revealed a 25 basis point reduction in the repo rate, alongside a shift in stance from neutral to accommodative. Moreover, India’s retail inflation based on the Consumer Price Index (CPI) measured at 3.16% in April, a decrease from 3.34% in March, representing an 18 basis point decline compared to the previous month.
Looking ahead, Anantha Nageswaran highlighted that India aims for a growth rate between 6.3% and 6.8% in FY26, which he considers a “reasonable target” that has also been acknowledged by the International Monetary Fund (IMF). Notably, Moody’s has likewise revised its FY26 growth projections to 6.2% YoY (up from 6.1%) and 6.5% YoY (up from 6.3%) for FY27.
