Emphasising that the country will come out stronger from the ongoing tariff uncertainty, 16th finance commission chairman Arvind Panagariya said on Friday that a bilateral trade deal with the US would position India “incredibly favourably” in the global trading landscape.
Panagariya noted that US trade restrictions on countries such as China, Vietnam, and Cambodia could work to India’s advantage.
“The US clearly wants to decouple from China. The US-China trade conflict is here to stay… There has been a long history of this sense within the US that China has operated rather unfairly,” he said while speaking at Ashoka University’s first Annual Growth Conference 2025 in New Delhi.
He added that the trade challenges India faces will become clear over the next three months. Since returning to office in January, President Donald Trump has aggressively pursued tariffs to recalibrate US trade relationships and secure greater market access for American goods. Although he initially announced reciprocal tariffs on all economies, including India, but those measures were later paused.
India is currently negotiating a bilateral trade agreement with the US, which is expected to be concluded by fall 2025.
“India, itself, if it actually successfully negotiates a trade agreement with the US—which I think also will open a door a little wider to having an agreement with the EU and UK—that will place India in the global trade equation incredibly favourably,” Panagariya said.
The tariff reduction will also put pressure on India to push labour and land reforms to push manufacturing, he added.
Discussing the long-term vision, Panagariya emphasised India’s ambition to achieve “Viksit Bharat by 2047. “This will require us to grow per capita income by about 7.3% annually. While it’s a challenging target, the growth trajectory over the past few decades, despite multiple shocks, provides a strong foundation for optimism,” he said.