NEW DELHI: The United States and India formally launched high level economic partnership talks on Tuesday, aimed at boosting commercial ties that are often eclipsed by US trade with China.
The partnership was launched by visiting US Treasury Secretary Timothy Geithner and Indian Finance Minister Pranab Mukherjee.
Mukherjee hailed the project as “a milestone” that would add a “new dimension” to ties between the world’s largest and fourth largest economies.
Geithner, on a debut visit to India where he lived for a while as a child, said the partnership underscored the need for both countries to work more closely together.
“Our ability to cooperate on economic and financial issues will be critically important to the success of global efforts to create conditions for a more stable global financial system,” he said.
“Our economic relationship presents huge opportunities,” he said, adding that both countries faced an “urgent challenge” in ensuring the benefits of economic growth could be shared by all.
The two sides are working on a long-term strategy focusing on macroeconomic policy, regulation and infrastructure financing.
The 48-year-old Asia expert met Indian Prime Minister Manmohan Singh for half an hour before his talks with Mukherjee in which he pressed India to open up its highly regulated markets to US investment.
Washington argues freer Indian markets would give the emerging nation cheaper access to capital to finance the billions of dollars needed to overhaul its dilapidated infrastructure, seen as a restraint to higher economic growth.
The new US-India Economic and Financial Partnership was first announced last November by US President Barack Obama during a visit by Singh to Washington.
It involves regular cabinet-level meetings in line with a similar dialogue between the United States and China.
Geithner said he was keen to talk to Indian policymakers about tightening global standards for controlling risk as markets become more integrated in the wake of the financial crisis.
US-India relations have blossomed after years of Cold War mistrust, Indian unease about close US ties with Pakistan, and Washington’s displeasure over New Delhi’s acquisition of a nuclear bomb.
Last month, the two countries signed a trade and investment cooperation framework which US Trade Representative Ron Kirk said would tap the “almost limitless potential” of their trade relationship.
“This trip is significant just for the fact that it is happening,” said Arvind Subramanian of the Peterson Institute for International Economics.
“First and foremost, this trip is about symbolism, aimed at establishing a parallelism with the US-China relationship,” he wrote in a recent commentary.
Trade between India and the United States has roughly doubled in the past five years as India has become one of the world’s foremost emerging markets.
But that relationship, for years focused on trade and outsourcing, is increasingly looking towards investment.
Bilateral foreign direct investment was worth 21 billion dollars in 2008, according to the treasury, a pittance compared with flows between the United States and Europe or China.
“One reason I am going to India is to get a better sense of what is happening there both in the economy and the broad reform process in the financial sector,” said Geithner. He will visit Mumbai, India’s business and financial capital, on Wednesday.
Source The News
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