The exports of the Indian economy are going to get affected in case the global trade war worsens further said the industry body Assocham. The chamber stated that if this tariff war turns into a full-scale global war, it could do a collateral damage to the Indian economy with the exports of the country taking a hit, GDP taking a setback and the current account deficit facing pressure. It also stated that the measures that are being taken by the US will not have a direct implication on India but the collateral damage is going to affect the overall sentiment in the form of an adverse impact.
It also added that even if India decides to take a responsive action on its imports, the impact on the exports could be much more as the volatility in the foreign exchange rates rise. The government was asked by the chamber to come up with a contingency plan which also included the opening bilateral trade along with key trading partners in order to isolate the country from the impact of the protectionist measures. It also said further that in case the confidence of the market wears out, the outflow of the portfolio investment will take a toll on the dollar rates.