Trump Tariffs: RBI Governor Indicates Readiness To Respond
"We will not be found wanting in our job," Governor Sanjay Malhotra said, just days before the US begins charging a 50% tariff on Indian goods.
Reserve Bank of India Governor Sanjay Malhotra on Monday indicated the central bank's readiness to take appropriate measures to support the economy, just days before the US begins charging a 50% tariff on Indian goods.
"Whatever is required to support economic growth, including those of sectors that are impacted more, we will not be found wanting in our job," Malhotra said at the annual banking conference FIBAC jointly organised by the Indian Banks Association and FICCI at Mumbai.
The Trump administration has imposed a 25% punitive tariff on India for purchasing Russian oil, on top of a 25% base rate. This will kick in from Aug. 27.
The governor expressed hope for India-US trade negotiations and a minimal impact of tariffs. He noted that apparel, gems and jewellery, shrimps, etc. will face the harshest burden of US tariffs.
Malhotra said the RBI lowered India's GDP forecast by 20 basis points in April after the 'Liberation Day' tariff announcements. The central bank has also eased monetary policy by slashing the repo rate by 100 bps and pumping liquidity into the system.
He also said it is important for countries to trade in local currencies to cushion from forex volatility and highlighted India's agreements with four countries.
"Cross-currency border engagement is slow progress, but will surely grow," he said.
India has been promoting the use of the rupee in its international trade to hedge exposure to the dollar system.
