Visiting U.S. Treasury Secretary Timothy Geithner welcomed the reforms recently announced by India, saying they offer a promising path to improving growth.
Geithner and U.S. Federal Reserve Chairman Ben Bernanke, accompanied by other top U.S. officials, arrived in India Tuesday for a two-day trip prior to proceeding to Tokyo for the annual meetings of the International Monetary Fund and World Bank.
Their arrival coincided with the recent major economic and other reforms supporting foreign direct investments, which were announced by the Indian government led by Prime Minister Manmohan Singh as its battles serious economic problems, including high inflation and burgeoning deficits.
"The reforms outlined by the government of India offer a very promising path to improving growth outcomes for the Indian economy," Geithner told a joint news conference in New Delhi, with India's Finance Minister Palaniappan Chidambaram.
One of the reforms would allow FDIs in India's $450 billion multi-brand retail sector, paving the way for U.S. retail giants like Walmart to gain a bigger foothold in Asia's third largest economy. Other reforms would raise FDI cap in insurance to 49 percent from the current 26 percent and FDIs in the huge pension industry.
Geithner and Bernanke were in India to participate in the 3rd annual meeting of the Indo-U.S. Economic and Financial Partnership. Bernanke also met with his Indian central bank counterpart, Gov. Duvvuri Subbarao.
In a joint statement, Geithner and Chidambaram said the Partnership meetings have served as the forum for the highest level of engagement between India and the United States, the U.S. Treasury Department reported on its website.
"Governor Subbarao and Chairman Bernanke and other senior officials participated in our meeting. We are committed to continue to build on our past discussions and explore new areas to deepen and broaden our economic and financial engagements," the statement said.
In the statement, Geithner and his Indian host said the growing trade and investment between their countries "across a wide range of products, services, and technology is a sign of our commitment to build our relationship on a solid foundation that utilizes our mutual strengths.
The statement noted India's 12th five-year plan calls for an investment of $1 trillion in the infrastructure sector, adding infrastructure debts funds and other "recent capital market reforms offer huge investment opportunities for U.S. businesses and investors."
The Wall Street Journal quoted Geithner as saying much progress has been made in the United States in repairing the damage caused by its financial crisis to ensure stronger future growth, but added the country faces challenges in the areas of job growth and fiscal reform.