It’s also important to note that Nageswaran’s optimism has come undone in the recent past. “My personal confidence is that, in the next couple of months, if not earlier, we will see a resolution at least to the extra penal tariff of 25%,” he said in September.
By November, however, he turned more cautious. “Hope is all we have that it will be done soon,” he told CNBC-TV18 at the Global Leadership Summit about a month earlier.
“I believe this is as much a matter of geopolitics as it is of bilateral trade,” the CEA said. “Right now, it is very difficult to put a timeline to it,” he added in his latest interview.
So far, no deal has materialised, the equity markets have turned choppy to say the least, and the rupee has weakened past the 90-to-the-dollar mark.
“Having a weaker rupee at this point is not a major problem, as it benefits the export sector given global uncertainties,” Nageswaran added on Wednesday.
Read more: Why a weak rupee may not be such a bad thing for now
The US imposed a 50% tariff on Indian exports entering its market from August 27, including a 25% penal duty tied to India’s continued purchases of Russian oil.
The higher levy has squeezed labour-intensive sectors such as shrimp, textiles, leather, and footwear, with exporters warning of a steep fall in shipments.
The tariff issue has added strain to India-US trade ties, already frayed since US President Donald Trump decided to unilaterally impose duties on Indian goods. India has consistently termed the measures “unjustified.”
The two sides had projected a likely deal by the fall of 2025. Earlier this week, Trump dampened hopes of progress with a hint of likely action against India’s rice exports to the US.
US gets more than a quarter of its imported rice from India, according to Anjali Prasad, the country’s former envoy to the World Trade Organisation (WTO).
Any new duties at this stage, he warns, could prove counterproductive for the negotiations currently underway in Delhi, warned Harsh Pant, Vice President at the Observer Research Foundation.
You can watch the entire conversation here:
According to the US Trade Representative’s office, India–US goods trade crossed $128 billion while service trade totalled an estimated $212.3 billion in FY24, and a settlement of tariff disputes is expected to give further boost to exports, supply-chain diversification and investment flows.
Beyond trade ties, Nageswaran said India’s medium-term economic outlook remains robust. The CEA reiterated that the FY27 growth trajectory looks strong as investment momentum and manufacturing activity pick up.
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