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Journalism of Courage
US Treasury Secretary Timothy Geithner today said India’s reform measures like opening of multi-brand retail to foreign investment will offer a “promising path” to improve growth and investor confidence.
“The reforms outlined by the Government of India offer a very promising path to improving growth outcomes for the Indian economy,” Geithner said at a joint news conference with Finance Minister P Chidambaram.
Later addressing the industry leaders,he said: “I feel very encouraged by the initiatives taken by the Indian government… It’s good for us that we are here this time when there is so much change in the air.”
Geithner’s comments come nearly three months after US President Barack Obama’s remarks that India restricted foreign investment in many sectors and cited concerns over deteriorating investment climate to endorse another “wave” of economic reforms.
In the past few weeks,the Indian government has taken a slew of reform measures,including opening the multi-brand retail chain to foreign investment up to 51 per cent and hiking FDI investment limit in insurance and pension to 49 per cent. It also liberalised FDI norms for aviation and broadcasting sectors.
“The recent reforms advanced by Prime Minister (Manmohan) Singh and Minister Chidambaram will help provide a foundation for stronger economic growth,an increase in investment,and more widespread gains in income,” Geithner said.
Committed to strengthening bilateral economic ties,the two countries discussed ways to further lower barriers to trade and investment to facilitate stronger economic growth.
Stating that India was “deeply locked into the global economy”,Chidambaram said he had raised concerns over the US Federal Reserve’s quantitative easing (QE) with Geithner.
“I raised the concern that it (QE) may impact commodity prices and commodity prices may rise,” Chidambaram said.
“There is also,of course,a beneficial side. Some of that money may come to India as investments. But we need to balance both the advantages and disadvantages.”
He said that it was too early to conclude as to what would be the impact of this latest round of QE. Under QE3 the US Fed buys bonds backed by housing mortgages to lower interest rates and boost the economy.
Geithner and US Federal Reserve Chairman Ben Bernanke are on a two-day visit to participate in the 3rd Cabinet Level Meeting of Indo-US Economic and Financial Partnership. Among others,the meeting was also attended by RBI Governor D Subbarao. Later in the evening Geithner met Prime Minister Manmohan Singh.
Uncertain economic situation has impacted foreign fund flow into the country with FDI declining 67 per cent to USD 4.42 billion in the April-June quarter.
Geithner and Bernanke are scheduled to visit Mumbai tomorrow before leaving for Tokyo to attend the International Monetary Fund and World Bank meetings.
Geithner said today’s meeting focused on lowering barriers to trade and investment and facilitating stronger and more inclusive growth.
The two sides said they realise that continued investment in “our infrastructure,in our people,and in our institutions” is critical to driving innovation,and increasing job creation and growth in the two economies.
“We are committed to make these investments to enhance competitiveness of our economies and to prepare our people to compete in today’s globalised world that is ever changing in the way products and services are delivered,” the statement
said.
India,US discuss ways to lower barriers to trade,investment
Committed to strengthening bilateral economic ties,India and the US today discussed ways to lower trade and investment barriers further.
In a joint statement after the India-US Economic and Financial Partnership meeting,Finance Minister P Chidambaram and US Treasury Secretary Timothy Geithner said the two sides will also strengthen co-operation to combat money laundering and terror financing.
They said India and the US are committed to exploring new areas to deepen and broaden economic and financial ties.
“Both countries recognise the great potential benefit from working together to meet the challenges of a shared future to generate jobs,sustain growth and help ensure macroeconomic stability… We discussed ways we can further lower barriers to trade
and investment to facilitate stronger growth and job creation,” the statement said. “Our work continues on infrastructure financing.”
At the meeting,the two sides discussed economic and financial developments in their economies and in the world.
“We agreed to deepen our cooperation bilaterally and in multilateral fora,including the G-20 to contribute towards steering the global economy out of uncertainties and achieving strong,sustainable and balanced growth going forward,” the statement said.
The two sides agreed to expand cooperation to deepen capital markets and strengthen financial regulations.
The third partnership meeting was attended by RBI Governor D Subbarao and US Federal Reserve Chairman Ben Bernanke,among others.
“The Partnership (launched in 2010) meetings have served as the forum for the highest level of engagement between India and the United States,” the statement added.
The growing bilateral trade and investment across products,services and technology “is a sign of our commitment to build our relationship on a solid foundation that utilises our mutual strengths”,it said.
The two sides said they realise that continued investment in “our infrastructure,in our people,and in our institutions” is critical to driving innovation and increasing job creation and growth in the two economies.
“We are committed to make these investments to enhance competitiveness of our economies and to prepare our people to compete in today’s globalised world that is ever changing in the way products and services are delivered,” the joint
statement said.
Referring to the requirement of USD one trillion in India’s infrastructure as aimed by the country’s 12th Five Year Plan,the statement said: “Infrastructure Debt Funds and other recent capital market reforms offer huge investment opportunities for US businesses and investors.”
It further said that the two countries will continue to strengthen their economic and financial ties in order to realise the full potential of the US-India partnership to achieve maximum benefits for the American and Indian people.
India-US merchandise trade increased to USD 59.2 billion in 2011-2012 from USD 45.3 billion a year ago. The US investment in India has totalled to USD 10.7 billion (from April 2000 to June 2012).
