India's Strategic Approach to US Trade Talks

Former Reserve Bank of India Governor Raghuram Rajan has emphasized the need for India to be "very careful and clever" in its trade negotiations with the United States, particularly in the agricultural sector. He highlighted the risks of unconstrained farm imports due to the significant subsidies provided by developed economies to their producers.

Economic Growth and Trade Uncertainties

Rajan pointed out that India's economic growth has stabilized at 6–7%, but trade uncertainties, especially around tariffs and subsidies, could adversely affect the country's farmers if not managed carefully. He suggested exploring alternative strategies, such as encouraging foreign investment in value-added processing, to benefit sectors like dairy.

Opportunities Amidst Trade Tensions

Despite the challenges, Rajan sees opportunities for India to position itself as an alternative manufacturing hub in Asia, benefiting from the current trade tensions. He also called for a reduction in India's own protectionist measures in certain sectors to foster competition and growth.