Trade liberalisation on MFN basis with WTO nations to aid India: ADB's chief economist Albert Park

India's proposed trade liberalisation, including likely tariff reductions in the under-negotiation trade deal with the US, could be "actually beneficial" to the country, as per Asian Development Bank's chief economist Albert Park.

However, he said, this rationalisation should be done on the most favoured nation (MFN) basis that requires equal treatment for all WTO members on trade issues.

Park also said the country needs to work on its regulatory framework to make it easy for foreign investors while upgrading its infrastructure to really take advantage of the opportunity from supply chain diversification.


"I think trade liberalisation is important too...India still is somewhat protectionist. It has higher tariffs than in many countries in the region," Park told a select group of journalists on the sidelines of the 58th annual meeting of the Asian Development Bank.

"So, the engagement with the US administration on trade liberalization could be actually beneficial to India if it provides more momentum that it can more fully embrace globalization." He was responding to a query from ET on the global supply chain diversification and India's prospects.

Competitiveness
Park said India needs to be very competitive and that's what the priority should be in the near future, adding that trade liberalisation on an MFN basis under the World Trade Organisation framework can benefit all countries. He also called for more efforts to improve the investment environment.

"To really take advantage of the opportunity India needs to focus on the domestic environment for foreign investment, both in terms of the ease of doing business, the regulatory issues that companies complain about, and also infrastructure issues," he said.

If these steps are undertaken companies will be more likely to want to invest more in India as they decide among many choices, he added. Trade uncertainty, in view of the tariff changes by the US, was making it difficult for businesses to make plans to make new investments, he said. ADB on April 9 revised India's economic growth forecast for FY26 down to 6.7% from 7% earlier.