India US trade talks: Former Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed his opinion regarding the ongoing tariff talks between India and America. Rajan said in an interview given to American think tank DeKoder that India should aim to keep its tariff level in the range of 10 to 20 percent in the ongoing trade talks with America. India should not make any promise which will be difficult to fulfill.

Everyone is curious about the results of the ongoing trade talks between India and America. America has imposed a tariff of 50 percent on India. Market experts believe that there is every possibility of loss to the Indian economy due to this.

What did former governor Raghuram Rajan say?

During a conversation with American think tank DeKoder, Rajan talked about keeping India’s tariff level in the range of 10 to 20 percent. He also said that India should not make tough commitments like Japan and European countries. Due to which the country’s economy may suffer losses in future. According to Rajan, if India can reach zero tariff level in this tariff negotiation, it will be good for the country.

At the same time, we have to keep in mind that we should not be left behind by our competitors. Many countries of East and South Asia have agreed to 19 percent tariff on American tariff. Whereas, if we talk about developed countries like Europe and Japan, the tariff has been agreed upon at 15 percent. Raghuram Rajan feels that, keeping all these things in mind, India should keep the tariff level from America between 10 to 20 percent.

Tariff talks continue between India and America

America has imposed a huge tariff of 50 percent on goods imported from India. Due to which the demand for Indian products is likely to fall in the American market. Tariff negotiations have taken place at many levels between America and India. Recently, an Indian delegation has returned from a trip to America.

Indications are being given from both the countries that the talks will be positive. America is talking about a ban on buying Russian oil. However, India has clarified that their objective will be according to the interests of Indians.

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IMF on India’s GDP: At a time when the world’s economic growth is slowing down, India’s GDP is growing strongly. This has been approved by Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF). He said that at a time when many big economies of the world are facing challenges, India is playing an important role in global economic development.

During the annual meeting of IMF and World Bank held in Washington, Georgieva said that India’s strong economic policies and reformative steps have made it one of the fastest growing economies of the world.

The world recognized India’s iron power

Georgieva said that before the Corona epidemic, the global economy was expected to grow at the rate of 3.7 percent, but now it is limited to about 3 percent. He said that the last few years have seen a huge change in the global economic pace – while China’s economy slowed down, India’s has accelerated its pace. He further said that India has proved the doubters wrong on the basis of strong reforms and consistent policy efforts.

What does the latest estimate of IMF say?

According to the latest IMF estimates, India will remain the world’s fastest growing economy in the coming years. The organization says that India’s GDP can grow at the rate of 6.4 percent in the financial years 2025 and 2026.

IMF has increased India’s growth rate forecast. Earlier in the report released in April 2025, India’s growth rate was said to be 6.2 percent in 2025 and 6.3 percent in 2026 respectively. In comparison, China’s economy is projected to grow by 4.8 percent in 2025 and 4.2 percent in 2026.

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Afghanistan’s Foreign Minister Aamir Khan Muttaki is currently on a tour of India, which is a topic of discussion at present. This visit clearly shows that relations between India and Afghanistan are good. After America’s departure in the year 2021, Taliban captured Afghanistan, after which they formed their government there. However, India has not yet recognized them. Despite this, both the countries insist on good relations with each other. Meanwhile, if we talk about Afghan currency, it is surprising. Afghanistan is a poor country. Despite this, the currency here is more valuable than the Indian rupee. According to the report of XE.com, the value of 1 Afghani rupee is equal to 1 rupee 33 paise in India, whereas the value of 1 rupee in Afghanistan is only 0.75 paise.

It is shocking that how can the currency become so strong in Afghanistan under Taliban control, where unemployment, illiteracy and poverty are at their peak. Actually, there are many interesting reasons behind this. The Taliban government has banned the use of US dollars and Pakistani rupees. Due to this, the demand for foreign currency within the country has reduced and the price of Afghan rupee remains stable.

Value of Rs 1 lakh in Afghanistan
For example, if an Indian earns 1 lakh rupees in Afghanistan, then after coming to India its value will be 1 lakh 32 thousand rupees, which is 32 thousand more than the 1 lakh earned in India. This gap of 32 thousand is quite big in itself. However, if we talk about Pakistan and Bangladesh, the value of the currency there is much less than that of India. The value of 1 rupee in Pakistan is 3 rupees 17 paise, while the value of 1 rupee in Bangladesh is 1 rupee 37 paise.

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World Bank on India’s GDP: A relief news has come out for India between global economic challenges and the high tariffs of America. The World Bank has increased India’s economic growth estimate to 6.5 percent for FY 2026. Earlier this estimate was kept at 6.3 percent. The World Bank says that the pace of the Indian economy will remain strong due to the higher increase in domestic consumption, good performance of the agriculture sector, and improvement in rural wages.

Slight decrease in next year’s growth rate

However, the World Bank has warned that the impact of a 50 percent high tariff of 50 percent on Indian exports by the US will appear in the coming years. For this reason, the GDP growth estimate for FY 2026-27 has been reduced to 6.3 percent.

According to the World Bank’s South Asia Development Update report, South Asia’s total growth rate is expected to be reduced from 6.6 percent to 5.8 percent in 2026-27 in 2024-25. The report states that this decline is associated with regional uncertainty due to trade obstacles, technical changes, and the rapid emergence of Artificial Intelligence (AI).

Possible impact of tariff on India

The report said that India’s domestic conditions are currently better – especially agricultural production, rural increment, and GST reforms have strengthened economic activities. However, the report also added that about 75 percent of the goods exported to the US from India can have a negative impact on the growth rate in future.

Other major conclusions

• Despite a slight fall in the growth rate of South Asia, it will still be stronger than other emerging markets and EMDES.
• According to the report, inflation is likely to remain within the target scope of the Reserve Bank of India in the near future.

Overall, the latest assessment of the World Bank shows that India’s economy remains flexible on the strength of strong domestic demand, but American tariffs and global economic uncertainty may slow down its speed in the coming times.

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India Forex Reserve Drops: At a time when there is a high American tariff on India and the H1B visa fees have been increased, despite these adverse circumstances, every possible steps are being taken by the Central Government to speed up the economy. One of those steps is GST Reform and Free Trade Agreement with other countries including Britain. But despite the strength on the economic front, while the Indian currency went on all time low recently compared to the US dollar, on the other side another disappointing news has come out. Hearing this, the neighboring enemy country will be happy with Pakistan as well as China.

Foreign exchange reserves decreased

In fact, the country’s foreign exchange reserves declined by $ 39.6 million to $ 702.57 billion in the week ended September 19. Information was given by the Reserve Bank of India (RBI) on Friday. A week before this, the total foreign exchange reserves of the country increased by $ 4.69 billion to $ 702.97 billion.

According to the Reserve Bank data, foreign exchange assets, considered to be the major component of currency reserves in the week ended September 19, declined by $ 86.4 million to $ 586.15 billion.

Why did there be a shortage?

Forex assets expressed in terms of dollars include the effect of price growth or depreciation in non-American currencies such as euros, pounds and yen. According to the central bank, the country’s gold reserves increased by $ 36 million to $ 92.77 billion in the current week. During this period, special drawing rights (SDR) rose $ 10.5 million to $ 18.87 billion. According to the Reserve Bank data, India’s reserved reserves in the International Monetary Fund increased by $ 296 billion in the week under review.

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