Domestic Demand: India’s Shield Against Tariff Wars
Madan Sabnavis, Chief Economist at Bank of Baroda, highlighted India’s robust domestic consumption as a crucial buffer against the impact of recently imposed reciprocal tariffs. He emphasized this internal strength as a key factor in navigating the challenging global trade environment.
This strong reliance on domestic demand, Sabnavis explained, significantly mitigates the negative consequences of export restrictions and retaliatory tariffs. The Indian economy’s resilience is thus less vulnerable to external shocks compared to export-dependent nations.
The assertion underscores the importance of fostering a robust domestic market. Government policies aimed at boosting purchasing power and infrastructure development are vital to further strengthen this resilience against future trade conflicts. This, in turn, ensures greater economic stability and reduces vulnerability to global uncertainties. The ongoing focus on infrastructure projects and rural development is a step in the right direction.
