We seem to be learning that currency depreciation is not always bad: Panagariya

Columbia University professor and former Finance Commission chairman Arvind Panagariya asserts that a weaker rupee is not inherently detrimental to the Indian economy. In an interview, Panagariya advocates for tariff reductions, eliminating quality control orders, and reevaluating bilateral investment treaties. He speaks about India's economic outlook, inflation stability, and manageable current account deficit.

Panagariya highlights the entrepreneurs' resilience in adapting to headwinds and emphasizes that depreciation can be a positive development. Competitiveness of Indian products in the domestic market compared to imported goods is noted as a key factor. The impact of a weaker rupee on import costs is discussed, stating that higher import costs do not necessarily mean higher prices for domestic goods.

Panagariya urges for the removal of trade barriers and the suspension of unnecessary quality control orders. The potential benefits of the US-India trade agreement and the need for revisiting bilateral investment treaties are also addressed. Regarding the US trade deal, Panagariya expresses uncertainty about its timeline, while cautioning against the potential misuse of tariffs by future administrations.

He highlights the weakening of WTO discipline under the current administration and the violation of WTO rules through subsidies. Panagariya expresses skepticism about the role of AI, posing a question about one's AI Quotient.