The report comes a day after the US imposed a 50% tariff on imports from India, raising concerns over exports and capital formation in the near term.
“If near-term economic pain is absorbed more by those who have the ability and financial strength to do so, then small and medium enterprises in downstream industries will emerge stronger from trade imbroglio. Now is the time to demonstrate an understanding of national interest,” the report said.
The ministry noted that India’s strong macroeconomic fundamentals continue to bolster the economy’s resilience. Recent policy initiatives—including the formation of a task force for next-generation reforms, forthcoming GST reforms, state-level deregulation measures, and the sovereign rating upgrade—are expected to reduce borrowing costs, attract foreign capital, and support both investment and consumption.
“These reforms mark the beginning of an accelerated phase of governance transformation, ensuring that India extends its own line of progress, becomes more resilient, inclusive and globally competitive in an era of rising global economic self-interest,” the report added.
While the immediate impact of the US tariffs on Indian exports may appear limited, the finance ministry cautioned that secondary and tertiary effects on the broader economy could be significant. In this context, ongoing India-US trade negotiations are expected to be crucial.The report also highlighted the planned rollout of next-generation GST reforms in the coming months, with a focus on reducing the tax burden on essential items. These measures are expected to provide direct relief to households and bolster consumption demand.
With inputs from TOI
