Arvind Panagariya at BT India @100: India must seal EU trade deal, reboot land and labour reforms now
He likened the current environment to 1991, when India liberalized amid a foreign exchange crisis.
- Aug 8, 2025,
- Updated Aug 8, 2025 3:01 PM IST
India must strike a Free Trade Agreement with the European Union and fast-track domestic reforms if it wants to stay on course for developed nation status, said 16th Finance Commission Chairman Arvind Panagariya on Friday, calling the current moment a "1991-style crisis" triggered by rising global protectionism.
Speaking at the Business Today India@100 summit, Panagariya said India should "aggressively pursue" an FTA with the EU as the U.S. turns protectionist, imposing a steep 50% tariff on Indian goods starting August 27 in response to India's continued purchase of Russian oil.
"At this pivotal moment, we should aggressively pursue the Free Trade Agreement with the European Union. As one market closes, we need to open wider another," he said. "The EU deal is critical, and so are reforms in land and labour markets."
He likened the current environment to 1991, when India liberalized amid a foreign exchange crisis. “Massive U.S. tariffs make this a defining moment. It’s time to take stock. Much has been done, but much remains,” he said.
India's growth remains “robust,” he added, but higher U.S. tariffs could divert Indian exports toward the EU. “Supply chains adjust quickly. If Vietnam enjoys better U.S. access, our exporters will shift to Europe where tariffs are lower.”
Panagariya reiterated that long-pending labour codes must be implemented without delay. “They’ve already been passed by Parliament—job creation and manufacturing depend on it.”
At the state level, he called for land reforms and zoning flexibility to prepare cities for business—not just residence. “We think of cities for citizens, not for enterprises. That must change.”
On regulatory overload, he was blunt: “No country requires so many permissions to export. Quality Control Orders are turning into tools of protectionism.”
Dismissing Trump's “dead economy” remark, he said, “You don’t grow at 7% plus if you’re dead. In dollar terms, we’re growing even faster. Maybe dead bodies do move—but not like this.”
India must strike a Free Trade Agreement with the European Union and fast-track domestic reforms if it wants to stay on course for developed nation status, said 16th Finance Commission Chairman Arvind Panagariya on Friday, calling the current moment a "1991-style crisis" triggered by rising global protectionism.
Speaking at the Business Today India@100 summit, Panagariya said India should "aggressively pursue" an FTA with the EU as the U.S. turns protectionist, imposing a steep 50% tariff on Indian goods starting August 27 in response to India's continued purchase of Russian oil.
"At this pivotal moment, we should aggressively pursue the Free Trade Agreement with the European Union. As one market closes, we need to open wider another," he said. "The EU deal is critical, and so are reforms in land and labour markets."
He likened the current environment to 1991, when India liberalized amid a foreign exchange crisis. “Massive U.S. tariffs make this a defining moment. It’s time to take stock. Much has been done, but much remains,” he said.
India's growth remains “robust,” he added, but higher U.S. tariffs could divert Indian exports toward the EU. “Supply chains adjust quickly. If Vietnam enjoys better U.S. access, our exporters will shift to Europe where tariffs are lower.”
Panagariya reiterated that long-pending labour codes must be implemented without delay. “They’ve already been passed by Parliament—job creation and manufacturing depend on it.”
At the state level, he called for land reforms and zoning flexibility to prepare cities for business—not just residence. “We think of cities for citizens, not for enterprises. That must change.”
On regulatory overload, he was blunt: “No country requires so many permissions to export. Quality Control Orders are turning into tools of protectionism.”
Dismissing Trump's “dead economy” remark, he said, “You don’t grow at 7% plus if you’re dead. In dollar terms, we’re growing even faster. Maybe dead bodies do move—but not like this.”