Trump presidency may be positive for India as energy prices can remain affordable: CEA

MUMBAI: Chief Economic Advisor G Anantha Nageswaran on Tuesday said Donald Trump's Presidency may be a "positive" for India as it will contain the energy prices, a crucial component for the GDP growth.

Nageswaran seemed to reiterate his concerns on food inflation and pointed out that tomatoes, onions and potatoes, along with gold and silver, were the source of a third of the overall 6.2 per cent print for October.

Speaking at SBI's annual banking and economic conclave here, Nageswaran said if India were to grow at a higher pace in the next 25-odd years, energy prices would have to be affordable to fuel the economy.

He also made it clear that while net zero goals are important, it is essential to generate economic growth and called it a "prerequisite for achieving net zero transition".

In the remarks that come amid the COP29 happening in Baku, the senior economic policy maker from India hit out at the developed world for burying the concept of differentiated responsibilities agreed at Paris and added Trump's win in the US election may be of help for India. "The fact that we have someone who is not religiously committed to net zero will actually offer higher degrees of freedom to countries like India to pursue its own net zero goals keeping in mind its own growth aspirations," he said.

There are some headwinds which India - running a surplus on goods and services exports to the US - faces under the Trump administration, Nageswaran said, adding any tinkering with tariffs may actually end up aiding India as it will reduce duties to become more competitive.

"Positives may actually end up being better than the negatives" under the new Trump administration, he said.

He, however, made it clear exports will not be the "most effective" engine of growth for India irrespective of the policies which are to be adopted in the US and pointed to slower growth in key markets, including Europe and China, for his premise.

On the domestic growth, he said there is a mixed set of data points emerging from the high-frequency data indicators, admitting that there are headwinds in some areas. "I think it is probably premature to conclude that this slowdown is going to be sticky and persistent. Even if we don't have enough evidence to say that it will be extremely short-lived, certainly, I will not be the one to make a pessimistic conclusion that this slowdown is something deeper," he said.

Amid calls for rate cuts done by Union commerce minister Piyush Goyal and also finance minister Nirmala Sitharaman, Nageswaran refrained from commenting anything on what the RBI's rate-setting panel should be doing.

Asked if the elevated rates are hurting growth in the economy, the CEA merely said such a study is yet to be undertaken.

He also declined to specify his growth estimates for the Q2, amid a growing number of analysts scaling down their projections.

Meanwhile, Nageswaran also asked Indian businesses to up their ambitions by doing a "mindset shift" and coming out of the "scarcity phase," which dominated the thinking for the three decades to the 1980s.