The economy of India is under the influence of short-term headwinds that include “unsettled relations with the US, rising global energy prices and absence of an ‘AI play’,” Chief Economic Advisor V Anantha Nageswaran said to the Reuters on Friday.
“There is this issue of unsettled relationship with the United States, starting from the tariff-related issues last year, which are still continuing,” said Chief Economic Advisor. His comments come amidst continued uncertainty in relation to India-US trade relations despite an interim deal being struck between the two countries on trade earlier in the year.
The Indian government is faced with yet another tariff threat since a recent US legislation granted President Donald Trump the powers to impose a 100 percent tariff on nations buying Russian oil and natural gas.
Additionally, Nageswaran made a connection between the challenges that India is facing in relation to trade and energy and the changing economic and geopolitical environment in the world at large.
“India, given its geography and its size, cannot obviously belong to any bloc,” Nageswaran said. But he warned that retaining such independence might carry some economic drawbacks, such as increased energy costs and disruptions in supply.
