India needs to cut tariffs and initiate reforms to boost investment, World Bank says

NEW DELHI, Feb 28 (Reuters) - India needs to cut import tariffs and make regulatory changes to attract foreign investment in Asia's third-largest economy, according to a World Bank report released on Friday.

"Relatively high import tariffs, especially on intermediate and capital goods, and significant non-tariff barriers contribute to high trade costs which inhibit greater openness in terms of imports and exports...," said the bank's Economic Memorandum on India.

India needs to simplify customs procedures, enhance policy predictability in regulations and cut red tape, it added.

U.S. President Donald Trump has repeatedly criticised India's high import tariffs and the climate for U.S. businesses. In response India has slashed import tariffs on high-end motorcycles and bourbon whisky.

The Trump administration has announced it plans to impose reciprocal tariffs on all countries that impose duties on U.S. goods. On Thursday, Trump said his proposed 25% tariffs on Mexican and Canadian goods as well as an extra 10% duty on Chinese imports will take effect next week.