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Business News/ News / India/  India should phase out its restrictive trade policies: IMF
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India should phase out its restrictive trade policies: IMF

The IMF came out with the statement after the conclusion of bilateral discussions with India under Article IV of the IMF’s Articles of Agreement

The IMF said a further global supply disruptions could cause recurrent commodity price volatility, increasing fiscal pressures on the world’s fifth-largest economy. (AFP)Premium
The IMF said a further global supply disruptions could cause recurrent commodity price volatility, increasing fiscal pressures on the world’s fifth-largest economy. (AFP)

New Delhi: While a sharp global growth slowdown in the near term could affect India’s trade and finance, the restrictive trade policy practices employed by the South Asian country should be phased out to improve its investment climate, International Monetary Fund (IMF) said on Tuesday.

The IMF, which came out with a statement after the conclusion of bilateral discussions with India under Article IV of the IMF’s Articles of Agreement, said a further global supply disruptions could cause recurrent commodity price volatility, increasing fiscal pressures on the world’s fifth-largest economy. “Directors acknowledged the authorities’ continued efforts to foster new bilateral trade agreements and India’s strong leadership during the 2023 G20 Presidency," IMF said in a statement.

“They broadly stressed that recent restrictive trade policies should be phased out and encouraged further liberalizing the FDI regime and improving the investment climate," it added. Under Article IV of the IMF’s Articles of Agreement, the agency holds bilateral discussions with members every year. India is currently negotiating free trade agreements (FTAs) with the UK, and the European Union (EU), among others, which will help the country substantially improve its exports.

“India’s recent restrictive trade policies should be unwound expeditiously....Reducing India’s high tariff and non-tariff import barriers, including the recently announced regulation of imports of laptops, tablets, and personal computers, would help boost growth and integration into global value chains," the IMF said. “Further liberalizing the FDI regime and improving the investment climate through structural reforms would catalyze foreign and domestic investments and help develop vibrant and competitive industries," it added. A finance ministry spokesperson hadn’t responded to emailed queries till press time. Meanwhile, the IMF has projected India’s economy will grow at 6.3% in both the current fiscal year and the next, below the RBI’s forecast for a 7% expansion in 2023-24.

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Rhik Kundu
Rhik writes about the Indian economy and its crucial indicators. He is constantly navigating corporates, decoding policies, and dabbling with everything in between.
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Published: 19 Dec 2023, 10:58 PM IST
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