Thaindian News

Washington, June 23 (IANS) Finance Minister Pranab Mukherjee and US Treasury Secretary Timothy Geithner will lead a high-level economic dialogue here next week aimed at seeking to tap vast opportunities offered by one of the fastest-growing economies in the world.

The second annual meeting of the US-India Economic and Financial Partnership will focus on infrastructure development, capital markets reforms, cooperation on the Group of 20 efforts to reduce trade imbalances, and efforts to combat money laundering, a senior US Treasury official said Wednesday.

The US official said removal of trade barriers to investment in India, closer economic cooperation and greater market access would help make it one of top-10 US trading partners. “Our partnership seeks to unlock an enormous untapped potential in our relationship,” he said.

“Given the relative size of our two economies, we still have major opportunities to expand our trade and investment linkages to the benefit of both countries,” said the official in a background briefing.

Besides rampant corruption, which was “an impediment to investors looking to commit substantial sums of money”, one of the key challenges is encouraging India to foster a more certain and established regulatory and legal structure that won’t leave investors guessing, the official said.

Also on the agenda would be terror-financing and trying to better align economic policies in the context of the Group of 20 nations talks, he said.

One area for discussion will be ways to open India’s “relatively closed” capital markets and banking sector to foreign investment, the Treasury official said.

“It’s an issue for India as it seeks to maximise its growth potential. It’s clearly important for India to develop long-term capital markets to provide adequate financing for infrastructure, which is a major constraint to India’s growth,” he said.

The biggest opportunity for US companies is India’s massive need for infrastructure development, where firms can provide expertise in engineering, financing and the capital equipment needed for the ports, expressways, airports, railways and power grid that India needs to improve the efficiency of its economy, the official said.

Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler will also participate in the talks with Indian officials, he said.

(Arun Kumar can be contacted at arun.kumar@ians.in)