International Monetary Fund (IMF) Managing Director Kristalina Georgieva has cautioned that the rising use of tariffs by major economies could undermine global trade and slow growth in emerging markets such as India.
She emphasized that maintaining open and fair trade is essential for sustained global progress and long-term economic stability.
Georgieva highlighted India as one of the fastest-growing economies in the world, crediting its consistent reform efforts for its strong performance.
“India is where it is today because it has pursued very significant reforms, tax reform, investment in infrastructure, both digital and physical, and improved connectivity across the country. That has injected this growth potential,” she said.
The IMF chief noted that India’s focus on long-term development through structural reforms has allowed it to sustain momentum despite global uncertainties. She warned, however, that protectionist policies could pose risks to open economies like India.
“Unless you are a very large and relatively closed economy, and India is not, protectionism doesn’t work well for you. Remaining open, competitive, and reform-driven is the best way forward,” Georgieva said.
She added that out of 191 IMF member nations, only three, the United States, China, and Canada, have leaned more strongly toward tariffs. At the same time, the vast majority continue to support trade under most-favored-nation rules.
Georgieva also urged India to maintain broad geopolitical relationships and an open approach to global trade to ensure long-term stability and benefit from global integration.
The IMF recently raised India’s growth forecast by 0.2% points to 6.6% for the 2025–26 fiscal year, citing strong private consumption and ongoing reforms.
India’s economy grew 7.8% in the April–June quarter, driven by robust domestic demand and investment, helping it remain the world’s fastest-growing major economy despite external trade pressures.
Georgieva called on major economies to resist protectionism and strengthen a rules-based global trading system, stressing that open trade and international cooperation are vital to ensuring shared prosperity as emerging markets like India continue to drive global growth.
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