The United States could remove India from its currency monitoring list of major trading partners, the Treasury Department said in a report published on Wednesday.

In April, the US placed India on a list of countries with potentially questionable foreign exchange policies along with China, Germany, Japan, South Korea and Switzerland. The Treasury Department maintained the same monitoring list in its latest report, but said India would be removed from the next bi-annual report if it continues with the same practices as in the last six months.

“India’s circumstances have shifted markedly, as the central bank’s net sales of foreign exchange over the first six months of 2018 led net purchases over the four quarters through June 2018 to fall to $4 billion (Rs 29,408 crore), or 0.2 per cent of the GDP,” the Treasury said in the report titled “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States”.

The report said recent sales have come amid a turnaround in foreign portfolio flows as foreign investors pulled portfolio capital out of India and other emerging markets during the first half of the year.

It said India has a significant bilateral goods trade surplus with the US, totalling $23 billion over the four quarters through June 2018, but India’s current account is in deficit at 1.9% of the GDP. “As a result, India now only meets one of the three criteria from the 2015 Act,” the report said. “If this remains the case at the time of its next report, Treasury would remove India from the monitoring list.”

The three criteria include a significant bilateral trade surplus with the US, a current account surplus that is at least 3% of the gross domestic product, and a persistent, one-sided intervention when net purchases of foreign currency are conducted repeatedly and total at least 2% of an economy’s GDP over a 12-month period.

The report also said India has been “exemplary in publishing its foreign exchange market intervention”. “The Reserve Bank of India has noted that the value of the rupee is broadly market-determined, with intervention used only during ‘episodes of undue volatility’,” it said.