- India prioritises its interests and does not decide under pressure from any country, CII President has said
- Rajiv Memani said he expect gains in engineering goods and auto component sector in the India-US trade deal
- He also spoke on the possible need for structural changes in the GST regime
India does not take any decision under pressure from any country, Confederation of Indian Industry (CII) National President Rajiv Memani has said, asserting that New Delhi's interest will always be a priority as it nears a trade deal with Washington.
"The industry wants a trade deal between India and America but it is important that this trade deal is in India's interest. The Indian government does not take any decision under the pressure of any country," Mr Memani said in an interview with NDTV.
His remarks came as equity investors are preparing for an eventful trading week ahead as the 90-day suspension period of the reciprocal tariffs announced by US President Donald Trump on a dozen of countries, including India, ends on July 9. An additional import duty of 26 per cent was announced on Indian goods entering the US. A positive outcome from the trade negotiations could further lift market sentiment, particularly benefiting trade-sensitive sectors.
"Our assessment is that if this interim trade deal happens, it will benefit India in labour-intensive sectors such as textile and apparel. We also expect gains in engineering goods, the auto component sector and chemical items. If these sectors are to be included in the trade deal, then discussions can be held through price control and quantitative restrictions," Mr Memani said.
The CII President also spoke on the possible need for structural changes in the Goods and Services Tax (GST) regime.
"It is necessary to reduce the GST on some items which are of necessity. It should be reduced on toothpaste, soap and some food items. Cement is not a luxury product. It is extremely important to promote low cost housing and construction," he said.
"We want only three GST rate slabs (5%; 28%; 12-18%) instead of the current four. Besides this, it is also necessary to make the GST audit system easy and simple. If a company has its operations in eight states, then its GST audit should be done at one place," he added.
He also suggested the petroleum and power sectors be brought under the ambit of GST.
On the state of India's economy, Mr Memani said: "The micro fundamentals of the Indian economy are strong. The balance sheets of banks and corporates are strong. In such a situation, India will remain the fastest growing economy in the world in the current financial year."
He added: "Our estimate is that the economy is expected to grow at a rate of 6.4 percent to 6.7 percent in the current financial year."
