India should ease import curbs and FDI norms for exterior steadiness: IMF

India wants to scale back import restrictions, particularly on intermediate items, improve the enterprise surroundings to spice up personal funding, liberalise the international direct funding (FDI) regime and develop commerce networks to maintain a wholesome exterior steadiness, the Worldwide Financial Fund (IMF) stated in a report launched Tuesday. It prompt cautious implementation of commercial insurance policies, minimisation of commerce and funding distortions and upkeep of alternate price flexibility to soak up shocks, with intervention used solely throughout market instability.

India's exterior sector in FY25 was stronger than anticipated, pushed by robust providers exports and decrease oil costs. Nonetheless, dangers stay with continued commerce and capital account restrictions limiting export and import development, in line with the IMF's Exterior Sector Report.

The present account deficit (CAD) rose to 0.8% of gross home product (GDP) in FY25 from 0.7% of GDP in FY24, because of rising import demand amid robust providers exports. It's projected to succeed in 0.9% in FY26, “reflecting resilient home demand and a slowdown in exterior demand”, the report stated. Over the medium time period, it's estimated to widen to round 2% of GDP, aligning with India's improvement wants, it added.
The report analysed 30 economies based mostly on exterior sector information as of Could 27, 2025 and IMF employees projections within the April 2025 World Financial Outlook.

Within the first half of 2024, a contained CAD and portfolio inflows strengthened the rupee, however this reversed within the second half because of fairness outflows and international uncertainty.