Latest news with #Badhan
Time of India
6 days ago
- Business
- Time of India
Trump's additional 25% tariffs may dent India's FY26 growth by 0.4%
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Economy Tired of too many ads? Remove Ads US President Donald Trump has imposed an additional 25 per cent tariff on imports from India and economist feel the move could dent the India's GDP growth in FY26 by 0.4 per Badhan, Economics Specialist at Bank of Baroda , told ANI, "We had initially priced in approx. 0.2 per cent impact (on GDP growth) of 25-26 per cent tariffs imposed by the US on imports from India. The additional 25 per cent hike will come into effect after 21 days. During this time or in the coming months, there is a likelihood that lower rates may be negotiated."She added that depending on the final trade agreement, the total impact of these tariffs on GDP growth may range between 0.2-0.4 per cent. Sectors likely to be affected include garments, precious stones, electronics, pharma, auto parts, and MSMEs."There appears to be downside risk to our growth forecast of 6.4-6.6 per cent if lower rates are not negotiated," she move has also triggered serious concerns among Indian exporters and trade experts. The fresh tariff has taken the total US import duty on Indian goods to 50 per cent, making Indian exports significantly more expensive in the American move, announced through an executive order on Wednesday (US time), is in response to India continuing its import of oil from executive order by Trump stated that, "I find that the Government of India is currently directly or indirectly importing Russian Federation oil. Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 percent".Ajay Bagga, a Banking and Market Expert, told that the steep tariff is a major blow. "India is now hit with 50 per cent tariffs, but frankly, once it crossed 25 per cent, it didn't matter. It could be 1,000 per cent or 5,000 per cent, here's no trade possible anymore," he pointed out that with Christmas orders ready and shipments already prepared, the move hits exporters hard. "If USD 1 billion worth of textile exports are halted, it directly impacts around 100,000 workers."Agneshwar Sen, Trade Policy Leader at EY India, called the additional tariff stated, "Political differences are best resolved through mutual dialogue and established forums, not through such measures. I remain hopeful that the Government of India will continue to engage and seek a balanced resolution with the U.S," he Federation of Indian Export Organisations (FIEO) also raised President, S C Ralhan, said, "Nearly 55 per cent of our shipments to the US market are directly affected. The 50 per cent tariff puts Indian exporters at a 30-35 per cent competitive disadvantage."He added that many buyers are now putting export orders on hold due to the higher landed costs."For MSMEs, absorbing this cost is not viable. This could force many to lose long-standing clients," he the executive order imposes tariffs on most Indian imports, some items have been excluded under Annex II of Executive Order 14257. These include certain mineral substances, metallurgical ores, fuels, industrial chemicals, and pharmaceutical India has clarified that it will continue to buy oil based on its own strategic tensions between the two countries now appear to be escalating, and the coming weeks may be crucial as both sides look to negotiate possible relief.
India Gazette
18-06-2025
- Business
- India Gazette
Fed is likely to keep rates unchanged but commentary will be crucial for markets: Experts
By Nikhil Dedha New Delhi, June 18 (ANI): As the US Federal Reserve gears up for its latest policy announcements, economists and market experts believe that the central bank is likely to keep interest rates unchanged, while keeping the door open for future rate cuts later this year. The federal funds rate currently stands in the range of 4.25 per cent to 4.50 per cent, and the Fed has consistently signalled caution in changing its stance amidst global uncertainty and domestic fiscal challenges. Sonal Badhan, Economics Specialist at Bank of Baroda, told ANI, 'We expect Fed to keep rates unchanged as it has guided on multiple occasions that the central bank will keep a watchful eye on impact of tariffs and its impact on inflation before cutting rates. We expect next rate cut by Fed in Sep'25.' Recent auctions of long-term US Treasury bonds have shown weak investor interest, raising questions about the fiscal outlook of the United States. Addressing this, Badhan added, 'Weak demand from investors is mainly reflective of lower confidence in fiscal health of the government and growth scenario. Inflated debt levels of the US government and recent tax bill is a major point of contention between investors and the government. Even Fed has highlighted concerns regarding the same as it has an inflationary impact on the economy'. She also pointed out that the ongoing tariff war uncertainty has lowered growth prospects, prompting foreign investors to diversify their portfolios. However, she clarified, 'We do not see movement in yields to have an impact on Fed's decision.' For India, the implications of Fed's decision are significant. 'We are currently seeing a spread of around 180-190 bps between India and US 10-year g-secs. Historically, on average we have seen a 300-400 bps gap. If Fed decides to cut rates, the spread will increase and help support capital inflows and the rupee,' Badhan noted. Banking and market expert Ajay Bagga in an exclusive conversation with ANI also echoed the view that a rate cut is unlikely in the ongoing Fed meet. 'No rate cut but two months of slow retail consumption numbers may lead to a more dovish commentary. Dot plot will be watched for hints towards rate cut timing and magnitude. Markets are factoring in September and December cuts,' he said. Bagga pointed to robust Q2 projections and said, 'Atlanta Fed GDP Now is showing a 3.5 per cent yoy growth projection for Q2 US GDP. So Powell will not be in a rush to cut, given energy cost spikes due to Iran conflict could yet reverse the inflation trajectory.' He added, 'Expect Powell to be more dovish in his press conference than the one-page policy statement. Trump is putting a lot of pressure on Powell to cut rates but policy uncertainty is holding back the Fed.' However Debopam Chaudhuri, Chief Economist at Piramal Group, expects a rate cut in this cycle. He told ANI 'I expect the FOMC to deliver at least two rate cuts of 25 bps each over the next five meetings scheduled in 2025, including the one in June.' However, he added that 'While June presented a favourable window for the first cut, given easing inflation and slowing growth, the renewed Iran-Israel conflict and its potential impact on energy prices may prompt the Fed to defer action until the July meeting.' Chaudhuri highlighted that by the end of 2025, the upper bound of the Fed funds rate could ease to around 4 per cent. The Federal Reserve's decision will come late on Wednesday, while most of the experts expects the rate to remain steady for now, but the commentary will be crucial not just for the US economy, but also for global markets, including India's monetary and capital flow dynamics. (ANI)
