A recently agreed-upon trade deal between India and the United States is anticipated to ease economic uncertainty and bolster key Indian sectors, according to top finance ministry officials.
Trade Deal Signals Economic Shift
The deal, finalized on Monday, includes a reduction of US tariffs from 50 per cent to 18 per cent. Department of Financial Services (DFS) Secretary M Nagaraju stated that “dark clouds of uncertainty had lifted from the world economy,” encouraging industry to “cheer up and heave a sigh of relief.”
Revenue Secretary Arvind Shrivastava indicated the agreement will “expand and deepen trade” between the two nations, creating opportunities for India’s labour-intensive and manufacturing sectors within the US market. He also highlighted the potential for increased collaboration in high and advanced technology.
Budgetary Implications and Future Outlook
While the current budget was formulated with previous economic conditions in mind, officials are now anticipating “greater buoyancy” following the trade agreement. Anuradha Thakur, DEA Secretary, affirmed the government’s commitment to its debt-to-GDP targets, describing the “Budget math” as transparent.
The Economic Survey previously projected a GDP growth rate of 6.8-7.2 per cent for FY27, a figure calculated before the trade deal was finalized. Thakur noted that the full impact on GDP growth will become clearer as details of the agreement are further analyzed.
Officials also expressed confidence in exceeding the government’s combined target of ₹80,000 crore for disinvestment and asset monetisation, citing positive momentum on the receipts side.
Banking Sector Focus
Looking ahead, the DFS Secretary highlighted concerns regarding credit growth within the banking sector, stating it is currently insufficient to support the “Viksit Bharat vision of 2047.” To address this, a high-level expert committee for the banking sector – previously proposed in the Budget – will be established to recommend improvements and strategies for increased credit availability.
Frequently Asked Questions
What is the primary benefit of this trade deal?
The trade deal is expected to create more opportunities for India’s labour-intensive and manufacturing sectors in the US market, according to Revenue Secretary Arvind Shrivastava.
How does the government view the impact on the current budget?
Officials are anticipating “greater buoyancy” in the economy following the trade deal, though the budget was initially prepared without factoring in its effects, as stated by Anuradha Thakur.
What steps are being taken to improve the banking sector?
A high-level expert committee will be established to assess credit growth and recommend measures to improve the banking sector, as announced by the DFS Secretary.
How will this trade deal affect the long-term economic relationship between India and the United States?
