Impact of Trump's Executive Orders on India's Budget
The recent executive orders by US President Donald Trump, particularly concerning trade policies, are not expected to significantly impact India's upcoming Budget. However, global inflation considerations may influence Finance Minister Nirmala Sitharaman's decisions.
Trump's Protectionist Trade Policy
- Introduced an ‘America First Trade Policy’ which includes global "supplemental tariffs".
- Threatened a 100% tariff on BRICS nations, including India, if they reduce reliance on the US dollar for trade.
Anticipated Government Response
- Economists believe the Indian government anticipated the tariff actions post-election results in November.
- The Budget process accounted for possible implications from US trade policies.
India is exploring trade deals, tariff cuts, and increased imports from the US as potential responses if Trump's trade threats materialize.
US Tariff Impact on North America
- US to impose a 25% tariff on imports from Mexico and Canada starting February 1.
- This could affect labor supply from Mexico, increasing wages and commodity prices, factors considered in India's Budget planning.
- Madan Sabnavis, Chief Economist, Bank of Baroda: The potential increase in commodity prices due to these tariffs has been noted in the Budget evaluation.
