According to Arvind Panagariya, Chairman of the 16th Finance Commission, India is poised to benefit from the current global trade and tariff disruptions, emerging stronger rather than weaker. During his address at the inaugural Annual Growth Conference 2025 hosted by the Isaac Centre for Public Policy at Ashoka University on May 2, he expressed a positive outlook for India’s future.
He highlighted the US’s intention to reduce its economic ties with China and anticipated that the US-China tensions would persist. Furthermore, he noted that the US might impose restrictions on Chinese imports through countries like Vietnam and Cambodia, potentially applying higher tariffs or stricter rules of origin than those applicable to India.
Panagariya emphasized that if India successfully negotiates a trade agreement with the United States, it could pave the way for a similar agreement with the European Union, significantly enhancing India’s position in the global trading landscape. He suggested that India would be well-positioned in a ‘China Plus One’ strategy, which could lead to increased manufacturing investments and domestic reforms.
He also pointed out that progress in manufacturing could stimulate the implementation of necessary reforms, particularly in labor and land markets. Panagariya stressed the critical importance of free trade, noting that India has substantial opportunities in the global economy, holding a 2% share in goods and 4% in services. He concluded that forging bilateral agreements with the United States, European Union, and the UK could unlock further trade opportunities for India.
His remarks arrive as India aims to finalize the initial phase of a bilateral trade agreement with the US by September or October this year, while also intensifying discussions with the EU to complete it by year-end. Additionally, India is in talks with the UK to conclude the free trade agreement.
