The US today sought greater engagement with India on the economic front, saying that their ability to cooperate was critical to creating a more stable global financial system, balanced economic growth and an open trading system, reports PTI.
“We face many challenges in common, such as how to extend financial services more broadly to people outside the traditional banking system, how to finance our very substantial public infrastructure needs and effectively leverage private money,” visiting US treasury secretary Timothy Geithner said here at a joint press conference with finance minister Pranab Mukherjee.
Prime minister Manmohan Singh recently pegged India’s infrastructure funding needs at
$1 trillion between 2012-17.
The US has separately been demanding greater access to the Indian financial services market, including insurance—which could be used to fund infrastructure. At present, foreign direct investment in the insurance sector is capped at 26%.
Mr Geithner said, “Our ability to cooperate on economic financial issues will be critically important to the success of global efforts to create conditions for a more stable global financial system, a more open global trading system.”
He also said that president Barack Obama remains committed to strengthening the relationship with India, which according to him was “an indispensable partner in securing the future prosperity and security of the world.”
The meeting comes in the backdrop of continuous growth recorded by the US economy in the last three quarters and a strong recovery in India.
Mr Geithner said that both India and the US face the challenge of making sure that gains from economic growth in both the countries are broadly shared. “The critical test, of course, of economic growth and economic policy is to make our economies work better.”
The two countries discussed issues on the macro-economic front, with emphasis on managing capital flows and fiscal policy measures.
“The discussion held today focused on global development with a special emphasis on US and Indian economies including monetary and fiscal policies, financial sector regulations and managing capital flow, infrastructure finance and Public Private Partnerships (PPP),” Mr Mukherjee said.
He further said that the two countries discussed three broad areas—micro-economic policies, financial sector and infrastructure finance, with a commitment to hold an annual meeting.
“The partnership envisions annual Cabinet level meetings at the finance minister and US treasury secretary level. This will be supplemented by sub-Cabinet level meetings and meeting of the working groups,” the minister said.
“I am confident that the partnership provides us an important platform for cooperation on economic issues thus contributing to strengthening and deepening of bilateral relations,” Mr Mukherjee said.