Indiaโs Approach: Trade deals must align with national interest.
On-going Talks: 5th round of India-US Bilateral Trade Agreement (BTA) talks underway in Washington.
US Proposal Reference: President Trump wants a deal similar to the US-Indonesia pact, where Indonesia gave full market access and agreed to major US imports.
Indiaโs Position:
Rejecting duty concessions in agriculture and dairy, sectors traditionally protected.
Seeking tariff relief on steel, aluminium, and automobiles.
Citing WTO rights to impose retaliatory duties if needed.
๐ Inflation Targeting and Monetary Policy
No Need to Change: Inflation targeting (IT) working well.
Target Band: 4% ยฑ2% (2โ6%) remains suitable.
Higher Inflation Risk: Would hurt poor and middle class.
RBI Suggestion: Some propose using core inflation (excluding food) for IT.
Future CPI Improvements: Base year revision to 2024 will improve data accuracy.
๐ฐ Fiscal Responsibility
FRBM Targets Must Continue: To ensure sound fiscal health.
Risks of Higher Deficit: More inflation, reduced growth, and higher interest payments.
Fiscal Progress:
FY21: 9.2%
FY25: 4.8%
FY26 (target): 4.4%
๐ญ PLI Scheme and Exports
Beyond Direct Gains: PLI benefits spill into non-PLI sectors.
FTAs + PLI: Together can drive FDI and export growth.
Electronics Sector: Shift toward more indirect domestic value addition shows deeper supply chain linkages.
