Chief Economic Adviser (CEA) Ananth Nageswaran Thursday said that global economic imbalances were already building up, and US President Donald Trump’s tariff measures were part of a broader reset in global trade dynamics. He emphasized that India is well-positioned to navigate these disruptions strategically.

“In some form or the other, the status quo in the world had built a lot of imbalance—domestic demand imbalances between some countries, some countries exporting and saving too much while others overdo it. Another form of imbalance exists between the discourse on net zero and economic growth, and between excessive focus on finance versus the real economy,” Nageswaran said. “These imbalances were coming to a head.”

He argued that such disruptions were necessary for the global economy to rethink its trade and economic playbook. “In some sense, you need these kinds of disruptions for us to rethink the entire playbook, and that is what is happening,” he said.

“We have a large domestic consumption-based economy. Exports of services are growing faster, and in terms of volume, they are much higher than the export of merchandise goods. The US focuses on merchandise goods, while our services exports will continue to do well.”

Despite concerns over trade restrictions, Nageswaran noted that India is strategically focusing on relationships in a broader sense and playing its cards well. “We should come out well because we have dealt with so many of the other shocks in the last 18 years, starting with the global crisis, and each one of them has left our economy in a better spot eventually,” he asserted.

“As far as the macro picture is concerned, even with the pervasive sense of uncertainty—notwithstanding the trade-related matters—even before that, we had elevated stock market valuations, interest rates fluctuating, and central banks still not having finished adjusting their tightening cycles. So, we were already entering 2025-26 with a lot of uncertainties,” he added.