Washington: The US Treasury Department has added India to its watch list of several countries which have potentially questionable foreign exchange policies, joining China and four others, according to a recent report issued on Friday.

The Treasury said that the “monitoring list” includes those “major trading partners that merit close attention to their currency practices.”

Along with India, the semi-annual report by the Treasury to the US Congress names five countries that continue on the list from October: China, Germany, Japan, Korea and Switzerland.

The mentioned countries remain on the list for two report cycles “to help ensure that any improvement in performance versus the criteria is durable and is not due to temporary factors.”

While there was no major trading partner found to be manipulating its currency, five of those included in the list meet two of the three criteria, while China is included for the reason that “it constitutes a disproportionate share of the overall US trade deficit.”

The United States has a deficit of about $337 billion with China of a total global trade deficit of $566 billion, according to the data provided by the government.

“We will continue to monitor and combat unfair currency practices while encouraging policies and reforms to address large trade imbalances,” US Treasury Secretary Steven Mnuchin said in a statement.

The report by the Treasury is required by the United States Congress to identify such countries that are trying to manage the value of their currency artificially to gain a business advantage, for example by keeping the exchange rate low to promote cheaper exports.

According to the report, India has a USD23 billion of trade surplus with the United States “increased its purchases of foreign exchange over the first three quarters of 2017,” although the rupee still rose in value.

And about China, which can be considered to be at the centre of a brewing trade dispute with Washington remained on the watch list by the Treasury. The Treasury said “the Chinese currency generally moved against the dollar in a direction that should” help reduce China’s trade surplus with the United States.

The Treasury kept Germany also on the watch list despite the fact that it is part of the European currency union, which would convey the meaning that it cannot control the exchange rate for the euro independently.

Even so, the report notes that Germany “has the world’s largest current account surplus” and has made “little to no progress in reducing this massive surplus the past three years.”

The Treasury has called for all the countries listed by it to implement economic reforms to address their surpluses.

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