Tariffs Impact on India Inflation: Malhotra

Mumbai, Aug 6 (PTI) Reserve Bank Governor Sanjay Malhotra on Wednesday said he does not see "major impact" of US tariffs on the domestic inflation.

Speaking with reporters at the central bank headquarters, Malhotra said there can be some impact if India retaliates with tariffs, but was quick to add that he does not see the same coming.

"As of now, we don't see a major impact of this unless we have retaliatory tariffs and so on and so forth which I do not foresee," Malhotra said, replying to a specific question on the impact of tariffs.


Deputy Governor Poonam Gupta added that a majority 50 per cent of India's consumer price inflation (CPI) basket is food items, which have very limited exposure to global developments.

Apart from that, there is a significant weightage of non-tradeable items in the basket, which is again not impacted by global developments like tariffs, she said.

"So, to that extent, the first order direct impact of these evolving uncertainties on India's inflation is likely to be very, very limited," Gupta said.

In what may end months of intense speculation on the tariffs that await Indian exports when they enter the US, President Donald Trump has reportedly signed an executive order imposing an additional 25 per cent tariff over the already announced 25 per cent tariffs on Indian goods.