Cloud tariffs and cloud economic prospects across the region have an impact on exports: Governor RBI

Mumbai: Reserve Bank Governor Sanjay Malhotra said on Wednesday that measures related to trade tariffs have cast off economic prospects in various regions and pose new headwind risks to global growth and inflation. Regarding the consequences of India’s global tariff war, he said it would have a negative impact on the country’s exports.

“Commodity exports will be reduced by global uncertainty, while services exports are expected to remain resilient. Headwinds of global trade disruptions continue to pose a risk of decline,” he said in an unveiling of the first bimonth monetary policy statement for the fiscal year.

The Reserve Bank of India will also reduce its estimate of 6.7% for the current fiscal year to 6.5% due to global uncertainty.

“Although these baseline forecasts have evenly balanced risks, uncertainty remains high after the recent surge in global volatility. It can be noted that the growth forecast for the year has been marked at 20 basis points relative to our February policy relative to the 6.7% assessment we had earlier assessed,” he said.

He said the declined revisions basically reflect the impact of global trade and policy uncertainty.

“Recent measures related to trade tariffs have exacerbated uncertainty, clouded the economic outlook across the region and brought new headwinds to global growth and inflation. In this turmoil, the dollar’s bond yields have dropped significantly; the stock’s bond output has dropped significantly; the stock market has corrected; and for more than three years, he said the lowest oil prices, he said three years.

In this case, the central bank is engaging in caution, with signs of policy differences between jurisdictions to reflect its own domestic priorities.

“But there are several known unknowns – the impact of relative tariffs, the resilience of our import and export demands, and the policy measures adopted by the government, including a proposed diplomatic agreement with the United States, to name just a few. These make quantification of adverse effects difficult,” he said.

Last week, U.S. President Donald Trump announced reciprocity tariffs on 60 countries including India, including India. India attracts 26% of mutual tariffs on a variety of products, including shrimp, carpets, medical equipment and gold jewelry.

The United States claims that American goods face 52% of the responsibility on the Indian market. A new tariff policy aims to reduce U.S. trade deficits and boost domestic manufacturing.

From 2021-22 to 2023-24, the United States is India’s largest trading partner. The United States accounts for about 18% of India’s total cargo exports, imports are 6.22%, and bilateral trade accounts for 10.73%.

In the United States, India’s trade surplus (the difference between imports and exports (the difference between imports and exports) in 2023-24 is US$35.32 billion. This is US$27.7 billion in 2022-23, US$32.85 billion in 2021-22, US$22.73 billion in 2020-21 and US$17.26 billion in 2019-20.

In 2024, India’s main exports to the US included drug formulations and biologicals (USD 8.1 billion), telecom instruments (USD 6.5 billion), precise and semi-precious stones (USD 5.3 billion), petroleum products (USD 4.1 billion), gold and other precise metal jewellery (USD 3.2 billion), ready-made garments of cotton, including accessories (USD 2.8 billion), and products of iron and Steel ($2.7 billion).

Imports include crude oil ($4.5 billion), petroleum products ($3.6 billion), coal, coke ($3.4 billion), shear and polished diamonds ($2.6 billion), electric machinery ($1.4 billion), aircraft, aircraft, aircraft, aircraft, parts and parts ($1.3 billion), and US$130 million (USD $130 million).

26% of the responsibilities exceed the existing responsibilities facing American Indian goods.