The chief of the International Monetary Fund (IMF), Christine Lagarde, has hailed India as the bright spot in the world economy on Monday.

Lagarde hailed India as a bright spot in the global economy ahead of talks with Prime Minister Narendra Modi in New Delhi.

IMF chief asked PM Narendra Modi to do more in order to open up the Indian economy. Lagarde said India had the "opportunity to become one of the world's most dynamic economies" , with growth rate running at more than seven percent.

Lagarde said, "The economy should be opened more fully to the world, and there's a good case for removing domestic constraints on growth, especially in energy, mining and power."

Christine said that among the developing markets, and in comparison to advanced economies, India is the bright spot.

For Lagarde, the first full budget given by the government last month will help in striking "a good growth-equity balance." She applauded Modi's determination to make India a key manufacturing hub and an easier place for doing business.

However, Lagarde also charted out a series of areas where the government is required to do more for encouraging investment.

Lagarde said "Further reforms of India's complex labour laws to encourage young job-seekers and boost female labour participation, as well as easing of land acquisition and other clearances, will help revive the investment cycle and achieve faster growth."

The IMF chief is paying a two-day visit to India and she will deliver an important speech in New Delhi before travelling to Mumbai on Tuesday.