India should gradually withdraw fiscal, monetary stimulus, says IMF

In its latest External Sector Report, IMF said India should further liberalise its investment regime accompanying it with reduction in tariffs, especially on intermediate goods

To maintain external sector balance at a comfortable level over the medium term, the International Monetary Fund (IMF) has recommended that India should gradually withdraw its fiscal and monetary policy stimulus, develop export infrastructure, and negotiate free-trade agreements with key trading partners to provide a sustainable boost to exports.

In its latest External Sector Report released on Thursday, IMF said India should further liberslise its investment regime accompanying it with reduction in tariffs, especially on intermediate goods. “Structural reforms could deepen integration in global value chains and attract FDI, hence mitigating external vulnerabilities. Exchange rate flexibility should act as the