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http://www.washingtonpost.com/wp-dyn/content/article/2010/04/06/AR2010040600640.html
Geithner hails economic partnership with India
NEW DELHI -- India and the United States have launched a new economic partnership that offers "huge opportunities" for both countries, U.S. Treasury Secretary Timothy F. Geithner said Tuesday during a two-day visit to India.
The trip is part of the Obama administration's efforts to strengthen relations with one of the world's fastest-growing economies.
Although few specifics were disclosed, Indian Finance Minister Pranab Mukherjee invited U.S. companies to invest in the fast-developing country's booming construction industry, which is building airports, railroads and 4,400 miles of highway a year. The last reflects the government's goal of making freight traffic more efficient while spreading wealth into India's vast countryside.
The world's second-most-populous nation, with 1.2 billion people, desperately needs better roads to support its thriving economy, India's leaders say, especially as it emerges as an economic power on the world stage. Nearly 40 percent of India's world-class agricultural products, such as mangoes and tomatoes, spoil because there are delays getting them to market, according to Indian economists.
"These are vast areas," Mukherjee said at a news conference with Geithner in New Delhi, adding that the country's infrastructure could absorb up to $600 billion in foreign investment over five years. "It will make the relationship between the two nations more vibrant and also help address global challenges."
India permits 100 percent foreign investment in road building. But it has long restricted many other forms of foreign investment, including importing wine, opening retail chain stores and credit and insurance investments. The new partnership could eventually result in other openings, because the United States is eager to gain access to India's vast markets, especially as it recovers from the worst recession since World War II.
"We meet at a time of encouraging prospects for the U.S. and Indian economies, and the beginnings of global economic recovery," Geithner said. "We're at a time of great optimism in the United States and around the world about the prospects for growth and reform in India. And I think we have a chance to demonstrate together this economic relationship offers very promising growth and opportunities for American firms just as it does for Indian firms."
India began to open its economy in the early 1990s. As a result, U.S. private investment here is worth $16.1 billion, about 10 times what it was in the late 1990s, according to the Indian government. But the cap on foreign direct investment continues to frustrate outside investors. For example, Wal-Mart had to team up with an Indian retail outlet before being allowed to open here, and sales are restricted to wholesalers.
Tensions also persist between India and the United States over American farm subsidies and India's refusal to open its markets to foreign farmers. Those disagreements are blamed for scuttling global trade negotiations in 2008.
But economists here say that Geithner was careful not to lecture India about specific reforms, especially in view of the U.S. credit collapse.
"The fulcrum of economic power in the world is shifting eastward," said Paranjoy Guha Thakurta, a New Delhi economist who is writing a book on how India's economy survived the economic meltdown. "Maybe our model has worked well -- with controlled and careful reforms. Maybe India will be able to help Americans find jobs over here in our markets."
Relations between the United States and India have warmed since then-President George W. Bush and Indian Prime Minister Manmohan Singh signed the framework for their historic nuclear deal in 2005. But Geithner's visit was also meant to calm India's more recent worries that the Obama administration is spending too much time on China, India's economic rival, and Pakistan, its political nemesis, experts said.
"Geithner's goal in the talks in India on Tuesday will be to give more prominence to U.S.-Indian relations, which have taken a back seat to Washington's ties with China in recent years," said Rani D. Mullen, assistant professor at the College of William and Mary and a South Asia expert. "The visit by Treasury Secretary Geithner clearly sends a strong signal by the Obama administration about the priority it places on maintaining a strong relationship with India."
This is Geithner's first trip to India as Treasury secretary, but he lived in Delhi for several years as a child when his father worked with the Ford Foundation. Geithner will travel to Mumbai on Wednesday to meet with personnel from American financial companies and Indian business leaders.
Geithner hails economic partnership with India
NEW DELHI -- India and the United States have launched a new economic partnership that offers "huge opportunities" for both countries, U.S. Treasury Secretary Timothy F. Geithner said Tuesday during a two-day visit to India.
The trip is part of the Obama administration's efforts to strengthen relations with one of the world's fastest-growing economies.
Although few specifics were disclosed, Indian Finance Minister Pranab Mukherjee invited U.S. companies to invest in the fast-developing country's booming construction industry, which is building airports, railroads and 4,400 miles of highway a year. The last reflects the government's goal of making freight traffic more efficient while spreading wealth into India's vast countryside.
The world's second-most-populous nation, with 1.2 billion people, desperately needs better roads to support its thriving economy, India's leaders say, especially as it emerges as an economic power on the world stage. Nearly 40 percent of India's world-class agricultural products, such as mangoes and tomatoes, spoil because there are delays getting them to market, according to Indian economists.
"These are vast areas," Mukherjee said at a news conference with Geithner in New Delhi, adding that the country's infrastructure could absorb up to $600 billion in foreign investment over five years. "It will make the relationship between the two nations more vibrant and also help address global challenges."
India permits 100 percent foreign investment in road building. But it has long restricted many other forms of foreign investment, including importing wine, opening retail chain stores and credit and insurance investments. The new partnership could eventually result in other openings, because the United States is eager to gain access to India's vast markets, especially as it recovers from the worst recession since World War II.
"We meet at a time of encouraging prospects for the U.S. and Indian economies, and the beginnings of global economic recovery," Geithner said. "We're at a time of great optimism in the United States and around the world about the prospects for growth and reform in India. And I think we have a chance to demonstrate together this economic relationship offers very promising growth and opportunities for American firms just as it does for Indian firms."
India began to open its economy in the early 1990s. As a result, U.S. private investment here is worth $16.1 billion, about 10 times what it was in the late 1990s, according to the Indian government. But the cap on foreign direct investment continues to frustrate outside investors. For example, Wal-Mart had to team up with an Indian retail outlet before being allowed to open here, and sales are restricted to wholesalers.
Tensions also persist between India and the United States over American farm subsidies and India's refusal to open its markets to foreign farmers. Those disagreements are blamed for scuttling global trade negotiations in 2008.
But economists here say that Geithner was careful not to lecture India about specific reforms, especially in view of the U.S. credit collapse.
"The fulcrum of economic power in the world is shifting eastward," said Paranjoy Guha Thakurta, a New Delhi economist who is writing a book on how India's economy survived the economic meltdown. "Maybe our model has worked well -- with controlled and careful reforms. Maybe India will be able to help Americans find jobs over here in our markets."
Relations between the United States and India have warmed since then-President George W. Bush and Indian Prime Minister Manmohan Singh signed the framework for their historic nuclear deal in 2005. But Geithner's visit was also meant to calm India's more recent worries that the Obama administration is spending too much time on China, India's economic rival, and Pakistan, its political nemesis, experts said.
"Geithner's goal in the talks in India on Tuesday will be to give more prominence to U.S.-Indian relations, which have taken a back seat to Washington's ties with China in recent years," said Rani D. Mullen, assistant professor at the College of William and Mary and a South Asia expert. "The visit by Treasury Secretary Geithner clearly sends a strong signal by the Obama administration about the priority it places on maintaining a strong relationship with India."
This is Geithner's first trip to India as Treasury secretary, but he lived in Delhi for several years as a child when his father worked with the Ford Foundation. Geithner will travel to Mumbai on Wednesday to meet with personnel from American financial companies and Indian business leaders.
