IMF Chief Kristalina Georgieva Warns Against Rising Tariffs, Urges Open Trade For Growth

Laying out global macroeconomic challenges, International Monetary Fund (IMF) Managing Director (MD) Kristalina Georgieva raised alarm against the tariff tactics used by the most powerful economies thus disrupting global trade and impacting growth pace in emerging markets.

Highlighting how the current global market scenario, the IMF Head said that while top economies, hinting likely at the US and China, have played up levy tricks, most countries are keen on a trade atmosphere rooted in fairness and transparency.

Further, Georgieva said that India stands out as one of the fastest-growing economies in the world and continues to make a major contribution to global growth because of its consistent reform efforts.

“India is where it is today because it has pursued very significant reforms — tax reform, investment in infrastructure, both digital and physical, improving connectivity across the country. That has injected this growth potential,” she said.

Notably, she said that India’s focus on long-term development via policy reforms in taxation, infrastructure, and digital connectivity has helped it maintain strong growth despite global uncertainties.

Also Read: Top Stocks In Focus On Oct 17: Infosys, RIL, Jio Fin, Wipro, Canara HSBC

IMF Weighs In On Best-Way Forward For India's Economy

Speaking on the choice of nations to impose tariffs, Georgieva said, “The largest economy in the world has chosen to use tariffs as an instrument in its relations with partners. But interestingly, the rest of the world has not followed — at least not yet.”

Among the IMF member countries, she said, only three — the United States, China, and to some extent Canada — have moved more forcefully towards tariffs.

“The other 188 have said, ‘Thank you, but no thank you,’ and have chosen to continue trading under most-favoured-nation rules,” she said.

Georgieva warned that protectionist policies do not work well for open economies. “Unless you are a very large and relatively closed economy — and India is not — protectionism doesn’t work well for you. India is an open economy, and remaining open, competitive, and reform-driven is the best way forward,” she explained.

IMF Revises India's Growth Projection

The IMF has revised India’s growth forecast upward by 0.2 percentage points to 6.6% for the 2025–26 financial year. It said that India’s strong growth momentum, supported by rising private consumption and ongoing reforms, will help offset the impact of global trade challenges and higher US tariffs on Indian goods.

In the April–June quarter, India’s economy grew at a faster-than-expected rate of 7.8%, driven by domestic demand and investment. This performance helped India retain its position as the world’s fastest-growing major economy, even as exports faced pressure due to higher import duties imposed by the US.