Raghuram Rajan Warns India: Don't Make 'Onerous' US Trade Commitments
Economist Raghuram Rajan has expressed concern over India's trade strategy with the USA. He warns against relying on short-term tactics and making 'onerous' commitments, citing examples from Japan and other countries.
Rajan suggests India should aim for a 10-20% tariff range in its negotiations with the USA. He believes this would help maintain competitiveness with Asian peers while protecting domestic industries. However, he cautions that disruptions in USA supply chains could lead to a permanent loss of business for Indian exporters, particularly in labour-intensive sectors like textiles. Rajan describes escalating tariff measures as a 'very big issue' for these exporters.
Rajan's advice comes amidst ongoing trade talks between India and the USA. His suggestions aim to balance competitiveness and protectionism, while also acknowledging the potential risks of supply chain disruptions.
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