The possibility of recession is deepening in the coming days in America’s economy, while India is on the path of rapid progress. While the pace of economic growth in America seems to be slowing down, the economy is moving forward on the strength of strong demand and better policies in India.
But meanwhile, issues like tariff war and inflation can create challenges for both countries. If we talk about the American economy, then after Kovid-19 it emerged rapidly. But now looking at its lethargy, it is being speculated that this fast was the result of a special policy increase, which is now weakening.
According to estimates, America’s GDP growth is expected to be less than two and a half percent in 2025. The reason for this is signs of reduction in export and consumption. Along with this, the trend of value ad is also decreasing in America. The ratio of savings and GDP in the US has rolled at the lowest level since 2011.
Import expensive in America
Actually, there are many reasons behind this decline. The first of this is the tariff war due to which imports in America are getting expensive and the people there are paying more prices for everyday things, that is, inflation is increasing which is reducing the power of people’s purchasing.
Also, due to expensive raw materials, the production of companies there is also being affected. In such a situation, if this tariff war increases, then the risk of recession in America can deepen. On the other hand, the story of India is completely different because India’s economy is growing rapidly and it is being counted among the fastest growing economies in the world. This year is estimated that India’s GDP growth can range from 6.4 to 6.6 percent.
Because domestic demand and investment in India remain strong. Not only this, there is a possibility of getting a chance to increase exports to India among tariff war.
What is the effect on the recession in America
This fast of India is due to strong domestic demand, government policies and increasing strength of middle class. However, challenges are no less in India, because if there is a slowdown in America, then India’s exports can be affected. Especially due to decrease in demand, pharma, textile and IT sector may face difficulties.
Due to tariff war, obstacles in global trade can increase, which can increase the prices of raw material and inflation. The US recession is expected to reduce India’s exports by 5 to 7 percent.
However, India also has fast opportunities despite these breakers. While countries like America and China are entangled in tariff war, India can become a manufacturing hub for other countries. In such a situation, if the government takes the right steps like making plans to reduce tariffs and increase investment, then India can remain in a strong position even in this era of uncertainty.
