Opinion To avoid reciprocal tariffs, lock down trade deal with the US
The economic consequences stemming from the uncertainty unleashed by US President Donald Trump's tariff policies are becoming visible. Countries across the world are being affected. On Tuesday, the International Monetary Fund lowered its forecast for global growth and trade this year. Alongside, the Fund cut India's growth estimate by 30 basis points to 6.2 per cent. A day later, the World Bank also lowered the country's growth projection, pegging growth at 6.3 per cent this year, down from its earlier assessment of 6.7 per cent. Some expect an even greater hit to growth. The RBI, however, is less pessimistic. It has scaled down its estimate of economic growth by just 20 basis points, pegging growth at 6.5 per cent.
The impact to the economy is likely to be felt in many ways. Exports of goods will be hit. Indian IT firms that derive a substantial share of their revenues from the US are also likely to witness a challenging environment as American companies scale back, possibly delaying existing projects and fresh deals. Some export hubs like Tiruppur, though, may benefit. The uncertainty is also likely to constrain fresh investments in the economy, especially as countries seek to redirect their exports. Alongside, the volatility in the financial markets may also make overseas fundraising difficult, even as commodity prices may remain subdued. Brent crude oil is currently hovering around $67 per barrel. Lower oil prices will be a positive for government finances.
In its last meeting, the RBI's monetary policy committee had cut the repo rate by 25 basis points in order to stimulate the economy. But, at this juncture, there is a case for deeper rate cuts. In fact, MPC member Nagesh Kumar has noted that 'one could be more ambitious and target a 50 basis point cut, which in my view may be more effective than two cuts of 25 basis points each'. However, as per the World Bank, 'the benefits to private investment from monetary easing and regulatory streamlining are expected to be offset by global economic weakness and policy uncertainty'. Greater clarity over the latter will emerge in the weeks and months ahead as countries try to stitch trade deals with the US. Scott Bessent, the US Treasury Secretary, has reportedly indicated the possibility of India being the first country to finalise a trade agreement. Successful closure of the deal would help the country avoid reciprocal tariffs and reduce uncertainty, providing clarity to both global and domestic firms.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
41 minutes ago
- Time of India
Asian shares slip, oil rises as investors weigh Iran scenarios
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel SYDNEY, - Shares slipped in Asia on Monday and oil prices briefly hit five-month highs as investors anxiously waited to see if Iran would retaliate against U.S. attacks on its nuclear sites, with resulting risks to global activity and moves were contained, with the dollar getting only a minor safe-haven bid and no sign of panic selling across markets. Oil prices were up around 2.8%, but off their initial were hoping Iran might back down now its nuclear ambitions had been curtailed, or even that regime change might bring a less hostile government to power at JPMorgan, however, cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76% and averaging a 30% rise over will be access through the Strait of Hormuz, which is only about 33 km (21 miles) wide at its narrowest point and sees around a quarter of global oil trade and 20% of liquefied natural gas supplies. "Selective disruptions that scare off oil tankers make more sense than closing the Strait of Hormuz given Iran's oil exports would be shut down too," said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia."In a scenario where Iran selectively disrupts shipping through the Strait of Hormuz, we see Brent oil reaching at least $100/bbl."For now, Brent was up a relatively restrained 2.7% at $79.12 a barrel, while U.S. crude rose 2.8% to $ in commodity markets, gold edged down 0.1% to $3,363 an markets were proving resilient so far, with S&P 500 futures off a moderate 0.5% and Nasdaq futures down 0.6%.MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5, and Japan's Nikkei eased 0.9%.EUROSTOXX 50 futures lost 0.7%, while FTSE futures fell 0.5% and DAX futures slipped 0.7%. Europe and Japan are heavily reliant on imported oil and LNG, whereas the United States is a net dollar edged up 0.3% on the Japanese yen to 146.48 yen , while the euro dipped 0.3% to $1.1481. The dollar index firmed 0.17% to was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising 2 basis points to 4.397%.Futures for Federal Reserve interest rates were a tick lower, likely reflecting concerns a sustained rise in oil prices would add to inflationary pressures at a time when tariffs were just being felt in U.S. are still pricing only a slim chance the Fed will cut at its next meeting on July 30, even after Fed Governor Christopher Waller broke ranks and argued for a July other Fed members, including Chair Jerome Powell, have been more cautious on policy leading markets to wager a cut is far more likely in least 15 Fed officials are speaking this week, and Powell faces two days of questions from lawmakers, which is certain to cover the potential impact of President Donald Trump's tariffs and the attack on Middle East will be high on the agenda at a NATO leaders meeting at the Hague this week, where most members have agreed to commit to a sharp rise in defence spending. Among the economic data due are figures on U.S. core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
Hindustan Times
an hour ago
- Hindustan Times
American woman leaves ‘average' life in US for extraordinary journey in India, calls it life-changing
An American woman has captured attention after sharing her bold decision to leave behind what she described as a comfortable but 'average' life in the United States to pursue a more meaningful and adventurous existence in India. Kristen Fischer, who moved with her family four years ago, has been documenting her journey on Instagram, where her videos have resonated with thousands. An American woman chose India for a better life and business, saying the shift was both financially wise and emotionally rewarding.(Instagram/kristenfischer3) (Also read: US woman shares why Indian milk stands out compared to milk back in America. Video) In one widely-shared video, Fischer shared a heartfelt reflection on the life-altering move. 'What would you choose? I knew I had control of which direction to take my life. I could choose an average life in the USA, or I could choose to do something bold and extraordinary,' she wrote in the caption. She added, 'We moved our family to India 4 years ago and haven't regretted it a bit. In these past 4 years I have met some amazing people, seen some incredible places, had some awesome food, and changed my heart forever. India has changed my life forever and I will never be the same. You only get one life, how will you live it?' Watch the clip here: Business in dollars, life in rupees In another video, Fischer offered a glimpse into the professional side of their life in India. She and her husband run a web development agency catering primarily to Western clients. According to Fischer, the decision to base their operations in India made perfect economic sense. 'Why do we choose to live in India and run our business operations here? It just makes sense this way,' she explained. 'Earn an income in US dollars and spend that income in Indian rupees. We run a web development agency that gets majority western clients, earning in dollars. Yet we live in India where the cost of living is much lower than in the USA, allowing us to spend our dollars here in rupees.' She added, 'It is simply easier for someone to come from the West and move to a place like India because our money goes further here and it is a much easier environment to succeed in business. Plus, this way we get to live in a country that we love. Seems like a win-win to me.' Take a look here at the video: Internet applauds her leap of faith The comments on her videos reflect admiration and curiosity. 'This is so inspiring – you're truly living your best life,' wrote one user. Another commented, 'India has that effect on people. It's chaotic, but it teaches you what matters.' (Also read: 'More money in the US, but…': American woman's advice to people who think USA is better than India) A different viewer said, 'You made the right choice – life's too short to be average.' Someone else wrote, 'Watching this makes me want to reconsider everything I've been doing.' One follower added, 'The way you talk about India is beautiful – it makes me feel proud.' Another summed up the general mood by saying, 'Bold move, but clearly the right one for your family. Respect.'
Time of India
an hour ago
- Time of India
Infosys' Bengaluru, Chennai, Pune centres top April on-site attendance numbers
Infosys Ltd's development centres in Bengaluru, Chennai and Pune were its top three offices in on-site attendance in April, according to an internal memo to employees. The Bengaluru-headquartered software service exporter shared the April in-office attendance data at a recent all-hands meeting with its India employees. In-person attendance at Infosys' Nagpur, Indore and Gurgaon offices was the lowest, according to the data seen by ET. The move is seen as Infosys' effort to get more people back to its campuses. Infosys' Bengaluru, Chennai and Pune centres registered in-office attendance of 57%, 52% and 50%, respectively. Nagpur, Indore and Gurgaon followed with 46%, 41% and 32%, in that order. Bengaluru-headquartered Infosys has around 323,500 employees, with the majority based in India. It has been following the return-to-office policy since November 20, 2023, requiring employees to work from office for at least 10 days in a month. Live Events The company has made it compulsory for employees at job level (JL) 5 and below to punch in at the office 10 days a month. If employees fail to do so, 'system intervention' gets triggered, which means the employees concerned will have to get their unofficial absence approved by their managers, else those days get marked as 'leave'. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Employees at JL5 include team leaders while those below include software engineers, senior engineers, system engineers and consultants. JL6 and above include managers, senior managers, delivery managers and senior delivery managers, but exclude vice presidents. Tata Consultancy Services ( TCS ), India's biggest IT company and Infosys' rival, had introduced a five-day work-from-office policy in October 2023, which was linked to employees' variable pay. Wipro , Infosys' cross-city rival, introduced a hybrid work policy that required employees to work from the office for at least three days a week. For more than a year now, many top software services exporters have tightened their work-from-home facilities in a bid to boost office attendance. This was done in the wake of not just the rise in cyberattacks and moonlighting, but also to encourage the benefits of working in a shared physical space. In April last year, K Krithivasan, chief executive of TCS, had highlighted that return to the workplace created 'shared experiences, nurturing greater learning, collaboration and camaraderie'. At its quarterly results conference, the management said that almost 65% of TCS' associates were then attending office for 3-5 days a week, within a quarter of the policy's implementation. TCS and Infosys did not respond to requests for comment. Other top-tier Indian IT firms, including HCLTech, Wipro, Tech Mahindra and LTIMindtree , also did not respond. Salil Parekh-led Infosys further broke down the data as per segments and job levels. In terms of verticals, engineering IoT (internet of things) topped with 71% across job levels, followed by engineering medical with 55%, IoT with 53%, and engineering automobile with 30%. Employees at JL6 across verticals recorded attendance between 62% and 73%. The next best performers were at JL5. In its latest annual report, Infosys said its hybrid work model, built around people and their comfort, offers the flexibility of working from home and office, at locations closest to their homes. 'As part of this strategy, we have set up offices in Ahmedabad, Guwahati, Kolkata, Visakhapatnam, Noida, Hubballi, Indore, Navi Mumbai, Nagpur and Coimbatore in India over the last few years,' the report said.
