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India's growth trajectory will remain unaffected irrespective of whether the upcoming meeting between Russian President Vladimir Putin and US President Donald Trump in Alaska on Friday results in war de-escalation or not, said Mehul Pandya, MD and Group CEO of CareEdge Ratings.
In an exclusive conversation with ANI, Pandya said, "War or No War, in the overall context of the Indian economy, we are bound to remain in a positive trajectory.....Our growth trajectory is nowhere impacted." Pandya added the war situation has stretched far beyond expectations, "When it started, no one thought it would last this long. Prime Minister Narendra Modi has repeatedly emphasised that this is not the time for war and that some solution should emerge. However, it is a very difficult conjuncture to make as each side will have its own interests and positions, and their flexibility will determine the progress." On India's expectations from Trump-Putin meeting, he said that if additional tariffs are considered, it appears there is an approach linked to oil shipments. "If there is a positive outcome from the meeting, there will be no basis for imposing additional tariffs, for example, the additional 25 percent tariffs that have been discussed. If you just remove that component, we won't be at a significant disadvantage compared to other emerging economies," he explained. He added that in sectors like electronics or pharma, which are currently kept out of the ambit of additional tariffs, India will remain vigilant. "If there is a complete end to the war, benefits will be there because there won't be any basis for the additional 25 percent tariffs," Pandya said. Apart from US tariffs, Pandya pointed out that the revival of private sector capex is a key challenge for the Indian economy. He emphasised the importance of developing competitiveness across sectors, finding new markets for manufacturing and services, and sustaining domestic demand to give confidence to the private sector for significant investment. On inflation, he said the current situation provides comfort, with the regulator appearing focused on the possibility of further rate cuts to boost growth. However, he cautioned that sourcing higher-cost oil could have some impact, though forex reserves provide a cushion. "Over the past year, the price difference between Russian oil and other sources has narrowed. Hopefully, this will not result in a substantial impact, but it remains a key variable influencing policy direction," he concluded. (ANI)
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