Gita Gopinath urges India to cut tariffs, focus on reforms for economic growth

Speaking to India Today, during the World Economic Forum (WEF) 2025 in Davos, Gopinath said, "India could afford to cut back on some of its tariffs just for its own sake because this is an important opportunity for India to plug itself into global supply chains."

While she acknowledged that India remains an attractive destination for businesses, Gopinath highlighted the need to address tariff concerns.

"The US is going to have bilateral negotiations with all their trading partners, to address what they feel are unfair trade practices," she noted.

She emphasised that India's priority should be domestic reforms rather than engaging in tariff disputes, especially as the country aims to establish itself as a global manufacturing hub.

"In terms of what prevents people from going into India, it is about still the ease of doing business, the infrastructure, the ability to buy land or sell land, contract enforcement," she explained.

On India’s economic outlook, Gopinath expressed optimism despite recent slowdowns, with the IMF projecting a 6.5% growth rate for the fiscal year.

She pointed out that this figure reflects India's 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 slowdown as "temporary," attributing it primarily to delays in implementing public infrastructure projects.

She stressed the importance of continuing investments in public infrastructure, particularly at the state level, while ensuring macroeconomic stability.