No impact of US-China trade war on India, says chief economic advisor Krishnamurthy Subramanian

Hyderabad: The ongoing trade war between the United States of America and China will not have any impact on Indian export which is just below 2 percent of the global trade, Chief Economic Advisor Krishnamurthy Subramanian said on Monday. Speaking to reporters on the sidelines of a programme here, he said the slew of measures announced by the Centre for the revival of muted growth in the economy was in the right direction, though it was necessary to focus on the ‘structural reforms.’ “Our exports share is still very small. Our share of global export trade itself is about 2 percent. Therefore, we still have an enormous opportunity to grow. Even if there is actually some shrinkage in the pie of the global trade, still we can grow our pie. Exports cannot grow unless actually, we emphasise on productivity, he said when asked about the impact of the tariff war between the US and China on India. [caption id=“attachment_6934291” align=“alignleft” width=“380”] File image of Chief Economic Adviser KV Subramanian. PTI [/caption] “I would also add that news that the United States and China are actually sitting together and there may be a breakthrough that is coming possibly in which case will be good,” he further said. Last week, Finance Minister Nirmala Sitharaman had announced a raft of measures, including the rollback of enhanced super-rich tax on foreign and domestic equity investors, exemption of start-ups from ‘angel tax’ and a package to address distress in the automobile sector, among others. “The measures that have been announced actually are in the right direction. What I have said is that it is important to focus on economic growth and it is also important for us to focus on structural reforms which is what the policy announcement that I’ve made essential in the corporate sector,” he said justifying the measures announced by the Finance Minister. According to him, the Centre would do all that is needed for economic growth. Subramanian said investments is a key driver of the economic growth while consumption is a force multiplier. On the proposed Rs 70,000-crore capital infusion by the Centre in public sector banks, he said, “I think this Rs 70,000 crore that has been announced for the recapitalisation of banks is quite important because the financial sector matters a lot for economic growth. Credit is basically the lifeline for economic growth. Therefore that is something which actually is important.”