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Former RBI Governor Raghuram Rajan said on Thursday that the Donald Trump administration’s stake on about 60 countries will be ‘reverse’. He said that its effect on India will be ‘less’. US President Trump has announced to impose additional value-based duty from 10 percent to 50 percent on imports from all business partners.
He told the news agency PTI, “We should accept that in the short term, it will be the first and foremost to adversely affect the American economy. This is ‘self -goal’ (to harm itself). Talking about the effects on other countries, the direct impact of any fee on India’s exports will be that prices will increase for American consumers, this will reduce their demand and consequently affect India’s economic growth.
The basic fee of ten percent will be effective from April 5 and 27 percent from April 9. Some areas have been exempted from fees. These include medicines, semiconductors and energy products. A well-known economist said, “In fact, since the US has also imposed a fee on other countries and India is competing with the producers of those countries, it will only be less than leaving the fees on India because American consumer will not be able to go to the producers as an option.”
Currently at Business School, Shikgo booth, Professor, Rajan said that the long -term purpose of Trump is to increase American production, but, if it is possible, it will take a long time to achieve it. In response to a question, he said that America’s counter -duty on India will probably not be going to increase inflation, because India will export less and the supply will be higher at the domestic level.
Other countries like China will now try to export India, as the American market is more closed. Asked if India can turn this crisis into an opportunity, Rajan said, “We can definitely reduce the fees we are increasing.” This will be beneficial for India, whether it helps us to reduce American duty. ”
He said that India needs to understand that the world has become very conservationist, so we have to work more cleverly about business. Giving examples, Rajan said that ASEAN and Japan in the east, Africa in the southwest and Europe in the northwest means. He said that establishing equal relations with China should be a priority. Also, we should also have a strong relationship with our neighboring countries, SAARS (South Asian Regional Cooperation Organization). ”
Rajan said, “This means to control political differences. As the world is getting divided into the regional block, South Asia should not be isolated. ”President Donald Trump has announced a historic step to combat around 60 countries to take a historic step to combat high duty rates on US products globally.
He has announced to impose a counter -duty of 27 percent on India. The Trump administration believes that India charges high import duty on American goods, so it was now necessary to take this step to reduce the country’s trade deficit and promote manufacturing.
