Hours before Indian Prime Minister Narendra Modi’s visit to the White House, President Donald Trump announced that the United States would be blowing Mutual definitions On its commercial partners.

It could hardly come in a more stringent time for India, which is already pressed by the slow economy and slow demand.

At a joint press conference, Trump said India will buy F-35 combat aircraft, oil and gas From the United States. The two countries will also start negotiations on the American trade deficit with India.

India runs a major commercial surplus with the United States, and these negotiations and oil and oil purchases may negatively affect its economy at a time when slowing passes.

With the expectation that the Indian economy will grow by 6.4 percent per year ending in March, and its slowdown in four years, the Moody government announced the exemption from the middle class income tax in the annual budget earlier this month.

A few days later, the central bank in the country Reducing the standard interest rate For the first time in nearly five years, by 0.25 percent to 6.25 percent with Governor Sanjay Malhotra says the less restricted monetary policy was more appropriate in light of the current “inflation dynamics”.

Economists warn that tax exemption may not be sufficient for the vast majority of Indians, whose income is still less than the taxable borders and who may still reeling the influence of the roaming epidemic, whose profits destroyed.

“There is a vast base [of people] Kaoshik Basso, professor of economics at Cornell University, says the recovery is no longer after the epidemic. “We see this in the data that the agricultural work base has increased. Agriculture may be just a parking space.”

Basso was referring to the people who left urban jobs during the narrow Covid insurance and length in India and returned to their villages. Without enough jobs with good wages to return to cities, they are in their villages who are doing seasonal agricultural workers.

Dhiraj NIM, economist at Anz Bank, expects a 0.2 percent impact on the growth of the total local products (GDP).

“People will consume a little more than that, but they will also save more. Some personal loans will happen.” “I do not think that support for consumption will compensate a trillion rupee [$11.5bn] In comfort by a lot. “

Moreover, any economic batch will be a short -term measure while the problems that it seeks to address is “more important”, as Alexandra Hermann, an economist in Oxford, warns. “There is nothing [in the budget] She says this is dealing with employment or skill, ”this will lead to wider and more sustainable growth. She says only about 2 percent of Indians pay income, unemployment and incomplete employment at the present time.

Some slowdown in India can be attributed to a periodic interest in demand after recovery after birth when the economy grew sharply. Industry heads and government officials believe that India was on a high growth path. The country is already the fifth largest economy in the world, and is expected to become the third largest economy by 2030.

But now “issues under growth,” says Cornell. “While there was at least two decades for no equality, what we see now has not been seen since 1947,” which is the year that India won its independence from the British.

Sensitive economic reconciliation

The government has sought to stimulate growth through strong spending on infrastructure such as roads and bridges. But the motivation provided during the epidemic means that the government needs to tighten its belt to achieve the goal of its financial deficit, which is 4.5 percent by next year. Nim from Anz says this reduced spending can also take some of the support she provided to reduce income tax.

The American visit of Moody comes to the Emir of this accurate economic moment in India. President Trump talked about India’s high tariff for American cars and other products aimed at protecting the Indian industry and creating local job opportunities.

India, such as Mexico and Canada, will enter negotiations to fill the surplus trade, but this may involve concessions that can hurt the Indian industry as well as purchases that cannot be tolerated. (New Delhi reduced a tariff on Harley Davidson budgets in the budget.)

“It should be noted that the Indian government has come out by avoiding definitions,” said Michael Kojman, director of the South Asian Institute at the Wilson Center, a research center based in Washington, DC. “A great reason for this is fragile economic growth.”

The Indian government also accepted the first 100 deportation from the United States without official protest, although it was sent on a military plane In the handcuffs. At their press conference, Modi said that these were victims of human trafficking, which had to stop. He did not offer with Trump to be treated by the United States, and some other countries enjoy their deportation.

High tariff on steel imports already announced by the United States must affect Indian exports. However, the Indian economy is largely nourished by local consumption compared to other Asian economies, says Hermann in Oxford Economic.

This is the deepest problem that has now begun to appear.

Cartic Moralidharan, a professor of economics at Tata, a consultant at the University of California, San Diego, says the government’s expanded food transfer program has supported the lower half in India and may have led to its participation in the economy.

However, he and others emphasize the need for more economic reform to encourage higher and more fair growth.

“In general, reforms come at a time of external challenges,” said Moradharan. He says, “We need another ’91.”

Cornell Basso suggests that increased inequality is better to treat it through “a slightly higher tax for the rich and its use to support small companies.”

Baso also says that small companies were affected by the costs of compliance with goods and services tax and can be simplified and reduced.

The government said it expected a growth rate of about 6.7 percent for the coming year, indicating strong growth in the current global scene. But NIM from Anz says, “The biggest anxiety must be to increase the per capita income and a better distribution of this income so that it reaches the people they need.”