Global trade and tariff uncertainties could become a catalyst for reforms in India over the medium term and for growth results, the reforms must run deep, an HSBC Research report said on Tuesday.
Potential US tariffs may have already become a catalyst for reforms like lowering import tariffs, opening up to regional FDI, fast tracking trade deals, and making the Indian rupee more flexible.
“And India does not have to look too far for models to emulate. Its success in services exports has demonstrated the power of moving up the value chain, from basic (call centre services) to high-tech (professional services),” said the report.
India’s goods trade deficit narrowed sharply in February to $14.1 billion, from $23 billion in January.
“The trade deficit tends to narrow in February but this time, it narrowed rather sharply to the lowest in more than three years,” the report mentioned.
India’s goods trade deficit narrowed to $14 billion and the services trade surplus rose to $18.5 billion, putting the overall trade balance in a rare surplus zone in February.
A normalisation in imports across the board – oil, gold, and core – led to the narrowing of the goods trade deficit, the report mentioned.