India is one of 11 countries on the US Treasury’s ‘watch list’ regarding its currency practices, the first of the Biden administrations, according to the April 2021 edition of the semi-annual report. India was on the list in the December 2020 report.
The report on the macroeconomic and foreign exchange policies of the major trading partners of the United States, which is presented to the US Congress, reviews the currency practices of the 20 largest trading partners of the US. Three criteria are used to review the partners: a significant (at least $ 20 billion) bilateral trade surplus, a material current account surplus, and ‘frequent unilateral intervention’ in foreign exchange markets.
The other 10 countries included in the list along with India, which according to the US Treasury “pay attention to their currency practices”, are China, Japan, Korea, Germany, Ireland, Italy, Malaysia, Singapore, Thailand and Mexico. These were all on the December 2020 list, except for Ireland and Mexico.
According to the US Treasury Department, India met two of the three criteria – the trade surplus criterion and the “frequent, one-sided intervention” criterion.
Treasury Secretary Janet Yellen said on Friday that the Treasury is working tirelessly to artificially damage its currency values by foreign economies, which put American workers at an unfair disadvantage.