Secondary, tertiary effects of U.S. tariffs on economy pose challenges: Finance Ministry report
The Ministry of Finance, a report that the US a 50% tariff on references from India, may seem limited to the emergency impact of recent US tariffs on Indian exports, but the secondary and third effects on the economy have emerged.
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The monthly economic examination published by the Ministry said that the ongoing Indian-US trade negotiations are critical in addressing these issues, including secondary and third effects of high tariff by the US on Indian goods.
A 50% tariff on Indian goods entering the United States, which entered into force on Wednesday, August 27, 2025, will affect more than $ 48 billion. The sectors that will carry the burden of high import duties given by the Trump administration include textile/ clothing, jewelry and jewelry, shrimp, leather and shoes, animal products, chemicals and electrical and mechanical machines.
“Although the emergency effect of recent US tariffs on India exports seems limited, the secondary and third effects on the economy reveal difficulties to address. In this context, the ongoing India-US commercial negotiations will be very important.” He said.
He said that India has actively diversified trade strategy to maintain its flexible trade performance in line with the global shift for diversification and strategic reorganization.
“This includes FTA and FTA negotiations with the FTA and the US, EU, New Zealand, Chile and Peru, which has recently ended with England and EFTA.
In the report, observing that the Indian economy is standing at a critical intersection, the strong economic performance in the last few years, along with policy stability and high infrastructure investment, said that ‘BBB-‘ to ‘BBB’e’ S&P raised a sovereign grade.
“This upgrade serves as a proof of the economy’s strong macroeconomic foundations and ongoing reform initiatives. The evaluation comes at a time when the economy shows significant resistance to the prudent policy management that contributes to strong domestic demand and economic stability in the face of global challenges.”
In the domestic front, the report may remain moderate in the near term by the help of the report, with the help of better transplantation of Kharif crops.
“Increased market arrival, comfortable buffer stocks and better output expectations in the quarter, combined with stable global oil markets, can keep the prices of food cereals moderate. It is possible to balance the international commodity prices under control global growth, and partially balance the impact of higher tariffs.” He said.
To increase economic growth in the middle of the challenging global landscape, the Prime Minister announced several initiatives focusing on policy reforms.
First, the creation of a task force for new generation reforms aims to further simplify regulations, reduce adaptation costs, and promote a planned environment in the coming months of new generation GST reforms.
By completing these measures, rating upgrade is foreseen to reduce borrowing costs, withdraw more foreign capital inflows, expand access to global capital markets, increase disposable income, reduce inflationist pressures, reduce input costs for enterprises and support growth.
Among the global uncertainties, these government initiatives draw a growth orbit directed by long -term reforms that will increase disposable income, reduce inflationary pressures and reduce costs for businesses.
He also said that the government’s focus on employment production through programs such as PM Viksit Bharat Rozgar Yojana, combined with reforms and skill development attempts in the education sector, aims to create a well -prepared labor force for the demands of the world.
Together, these reform initiatives and improved dominant rating will support growth by encouraging investments, encouraging consumption, increasing employment opportunities, and strengthening the trust in the long -term orbit of the economy.
Published – 28 August 2025 02:27
