Chief Economic Advisor (CEA) Anantha Nageswaran on Saturday said the government, along with various stakeholders, is working overtime to cushion India’s export sector from the impact of the 25% additional tariff imposed by the United States, which has raised the overall duty to 50%.Speaking virtually at an event organised by the Indian Chamber of Commerce, he said crises, whether minor or major, often act as catalysts for action by the government, private sector and households, PTI reported. Since the US tariffs took effect on August 27, “conversations have been happening in the last three to four days” involving exporting bodies, promotion agencies and ministries, he added.The Ministry of Finance and other ministries are “working overtime” to frame a strategy that would provide both a “time cushion” and a “financial cushion” so affected sectors can “weather the present storm and also emerge stronger,” Nageswaran said. He also noted that a proposed agreement with the US, negotiated “in good faith” and nearly concluded, had been delayed due to “unexpected developments,” though not denied.The CEA also referred to India facing a penal tariff for buying Russian crude oil, which the Ministry of External Affairs has described as unreasonable. He expressed hope that the tariffs would be “short-lived” and that “an understanding of the importance of the larger dimensions of the India-US relationship will eventually prevail.”Highlighting “silver linings,” Nageswaran pointed out that India’s real GDP grew 7.8% year-on-year in Q1, while nominal GDP rose 8.8%, above private economists’ estimates. He attributed the lower nominal growth compared to earlier quarters to “good deflation,” driven by easing input costs such as crude oil and industrial metals, even as enterprises retained pricing power.The manufacturing sector’s Gross Value Added rose 10.1% in nominal terms and 7.7% in real terms, reflecting resilience. He said this underpins optimism that full-year nominal GDP growth will stay near the 10.1% assumed in the Union Budget.Nageswaran flagged that the “huge tax cut” for households with annual income up to Rs 26.7 lakh, announced in February, is already showing in higher advance tax payments. Further relief is expected through GST rationalisation and simplification.He also pointed to the new employment-linked incentive scheme, which rewards both employers and employees, calling it crucial to balance job creation with competitiveness in the AI era.On the global front, the CEA underlined India’s credit rating upgrade by Standard & Poor’s — the first in 30 years — and expressed confidence that Fitch may follow. He stressed that fiscal prudence, with the deficit brought down to 4.4% this year from 9.2% in 2021, has reduced borrowing costs and the private sector’s cost of capital by three percentage points over the last decade.Nageswaran said India is actively diversifying trade ties through FTAs with the UAE and UK, and ongoing talks with Oman and Bahrain, some of which could materialise before year-end. Calling the current situation an opportunity, he urged industry to diversify export markets, invest in R&D and product innovation, and improve practices to stay competitive.“Each one of us has an obligation to ourselves, society, our employees and our customers to use this opportunity to improve the way we do business and strive for innovation and excellence,” he said.He added that the government will double down on deregulation, ease of doing business and job creation while engaging with the US to resolve the tariff issue.