Mumbai, July 26: Reserve Bank Governor Sanjay Malhotra on Friday welcomed the signing of the free trade agreement with the UK, saying it will help multiple sectors of the Indian economy.Speaking at the FE Modern BFSI Summit here, Malhotra said multilateralism has “unfortunately” taken a back seat, and the country needs more such pacts (like the UK FTA) with countries and added that negotiations with the US are in advanced stages.
“Hopefully, it (UK FTA) should help us… that is the way going forward now, because unfortunately multilateralism seems to have taken a back seat,” Malhotra said in the central bank’s first comments on the trade deal with the UK signed in London.
“It should help various sectors in our manufacturing as well as on the services side,” Malhotra added.
Malhotra said that given the current realities, where multilateralism has taken a back seat, it is necessary for India to have more such pacts with other countries.
He also acknowledged that there are many more such pacts in the negotiation stage.
India and the UK signed the FTA during Prime Minister Narendra Modi’s two-day visit to the UK. The agreement has been in the making for many years now and will open up markets for both countries across goods and services.
Meanwhile, Malhotra backed his US counterpart Jerome Powell for his work on upholding the Federal Reserve’s independence, at a time when US President Donald Trump has gone public with his disagreement with its policies.
“… He (Powell) is doing a very good job. Maintaining the independence of the central bank is very important. I think he has done a commendable job,” Malhotra said.
On cryptocurrency regulations, Malhotra said the government-appointed panel to look into the issue in India will take into account the RBI’s concerns.
There is no work for a separate currency for the BRICS grouping, the RBI governor said, maintaining that like any other country, India is working on popularising its own currency, and the US dollar is here to stay.
India has an agreement with the UAE and is also looking at some arrangement with Maldives on the rupee trade, he said.
“The dollar is here, as you’re all aware, it’s going to be here, you know, for some time, for a longish time. It’s because you need some universal cross-border currency,” the RBI governor said.
Meanwhile, he also appreciated the work done by the Ministry of Petroleum in managing the oil procurement despite the sanctions on Russia.