The US Treasury Department has removed India from its currency monitoring list of major trading partners. It, however, continued to keep China on its watch list, while urging the Asian nation to take necessary steps to avoid a “persistently weak currency”. In its semi-annual report to US Congress on International Economic and Exchange Rate Policies, the Treasury Department removed India and Switzerland from the previous currency watch list of countries with potentially questionable foreign exchange policies.

India, along with China, Japan, Germany, Switzerland and South Korea, were placed in the bi-annual currency watch list in October last year.

This is a positive development for India as it is out of the currency watch list radar, which could have ultimately led to a tag of being a currency manipulator. Countries which indulge in manipulating the currency exchange rate for gaining unfair competitive advantage in international trade often end up with the tag of a currency manipulator.

India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in May 2018 along with five other countries – China, Germany, Japan, South Korea and Switzerland.

In its next report in October 2018, the Treasury had said that India has made improvements and its name would be removed from the currency manipulation list in the next report.