Nirmala Sitharaman: Trade war will impact the flow of capital

Union Finance Minister Nirmala Sitharaman led the Indian delegation to the Annual Meetings Plenary session of the International Monetary Fund (IMF) and the World Bank Group held in Washington DC on Friday. During her address, Sitharaman said that increased trade integration, geopolitical uncertainties and high accumulated debt levels are the consequences of strong global coordination. 

The Finance Minister is currently on an official tour to Washington DC to attend the Annual Meetings of the IMF and the World Bank and other associated meetings. She is accompanied by Secretary, Department of Economic Affairs and other officials from the Department.

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"We need not wait for the slowdown to become a crisis," she said adding that trade wars and protectionism have generated uncertainties that will ultimately impact the flow of capital, goods and services. Sitharaman also called for concerted action to mitigate the disruption on account of synchronous slowdown and invoked the spirit of multilateralism for global growth. 

She also attended the working lunch session of the Development Committee, the ministerial-level committee of the IMF and the World Bank, in which members discussed the global economic outlook. 

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'Concerted action'

In her intervention, the Finance Minister mentioned that trade wars and protectionism have generated uncertainties that will ultimately impact the flow of capital, goods, and services. She called for ‘concerted action’ to mitigate the disruption on account of synchronous slowdown and to invoke the spirit of multilateralism for global growth. She further said that the increased trade integration, geopolitical uncertainties and high accumulated debt levels necessitate strong global coordination and that we need not wait for the slowdown to become a crisis.

The early warning exercise discussed upcoming risks to a global economy and stability. A special session on IMF resources and governance was also held early in the day in the context of the 15th round of the quota discussions concluding this year. Secretary at the Department of Economic Affairs Atanu Chakraborty led the Indian delegation. Sitharaman also led the Indian delegation at G20 finance ministers and central bank governors meeting in which the deliberations centred on international taxation and stable coins. 

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The ministers and governors also took updates from G20 deputies on quality infrastructure investment, debt sustainability, financing for universal healthcare and building effective country platforms and from the Africa Advisory Group on the Compact with Africa (CwA) initiative. 

On the discussions at the session regarding the work underway on developing a consensus solution on tax challenges arising from digitalisation, Sitharaman said a unified approach to the nexus and profit allocation challenges is a promising one that merits serious attention. A solution that is simple to implement, simple to administer and simple to comply with is needed. 

On the sidelines, she held several bilateral meetings, including with First Deputy Prime Minister and Finance Minister of Russia Anton Siluanov, Finance Minister of the Kyrgyz Republic Baktygul Jeenbaeva, Finance Minister of Switzerland Ulei Maurer, Australian Treasurer Josh Frydenberg and Finance Minister of Maldives Ibrahim Ameer. Chakraborty also held a one-on-one meeting with Director-General of the French Treasury Renaud Basso and Chief Financial Officer of the World Bank Anshula Kant. He also addressed investors in a session organised by JP Morgan.

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(with ANI inputs)