India’s Reforms Give Cushion Against Global Uncertainty: CEA Nageswaran

New Delhi, India: Chief Economic Advisor V. Anantha Nageswaran said India’s domestic reforms, including the recent GST revamp, are providing a much-needed cushion against global volatility. Speaking at an AIMA event in New Delhi, he highlighted that India’s growth outlook may be “more positively surprised than negatively” despite external risks.

The GST restructuring, which reduces four tax slabs to two starting September 22, is expected to soften the impact of the steep 50% US tariffs on Indian exports. Nageswaran estimated the net effect of the tariffs on GDP growth would be limited to 0.2–0.3% this year.

Key Benefits of GST Reform

Boost to purchasing power by lowering prices of goods.

Reduced uncertainty from second- and third-round economic shocks.

Support for fiscal stability, with government confident of meeting the 4.4% fiscal deficit target for FY26.

Structural Reforms and Private Sector Role

Nageswaran stressed that reforms are a “two-sided game”, requiring the private sector to focus on productivity and inclusive growth. He urged businesses not to seek excessive protectionism but to expand the economic pie while balancing technology and labour use to avoid social disruption.

He also underlined the need to lower compliance costs and “improve the ease of being honest” in doing business.

Broader Economic Outlook

India is not pursuing any alternative to the US dollar, according to the CEA.

Private sector must avoid burdening downstream industries, especially MSMEs, with higher costs.

Long-term resilience will depend on responsible private participation alongside government-led reforms.

Conclusion

Nageswaran emphasized that India’s reforms are strategic buffers against global shocks and will play a central role in sustaining growth, shielding the economy from external headwinds, and ensuring fiscal discipline.