Gita Gopinath said that India should focus more on domestic reforms than tariff battles as it looks to become a global hub for manufacturing.
International Monetary Fund’s first deputy managing director (MD), Gita Gopinath, suggested that India should consider reducing its tariffs to address US President Donald Trump’s tariff threat and for its economic benefit.
“India can afford to reduce a bit of its tariffs just for its own because this is an important opportunity for India to plug itself into global supply chains,” Gopinath told Rahul Kanwal, News Director, India Today and Aajtak, on the sidelines of World Economic Forum (WEF) 2025 in Davos.
She said the US will hold bilateral negotiations with all its trading partners to address what it feels are unfair trade practices. She said that India should focus on domestic reforms rather than tariff battles as it looks to become a global hub for manufacturing.
“In terms of what prevents people from going into India, it is still about the ease of doing business, the infrastructure, the ability to buy land or sell land, contract enforcement,” she said.
Gopinath maintained an optimistic view of India’s growth outlook despite recent slowdowns. The IMF projects India’s growth at 6.5% for the fiscal year, which she believes represents the country’s current potential growth rate.
“For the fiscal year as a whole, our growth number is 6.5%. So, we do expect to see a recovery. But first, potential growth is also at 6.5%. So again, this comes back to if you want to be able to raise potential growth by a lot more, you’re going to have to do the soft reforms,” she said.
Gopinath described the growth slowdown as “temporary” due largely to delays in implementing public infrastructure projects. She further emphasized the necessity of continuing the investment in public infrastructure, primarily at the state level, while maintaining macro stability.
