India's recent reforms initiatives very promising: Timothy Geithner
New Delhi: Describing India's recent reforms initiatives as "very promising", US Treasury Secretary Timothy Geithner on Tuesday said it would have positive outcomes for the country's economy.
"The reforms outlined by the government of India offer a very promising path to improving growth outcomes for the Indian economy," he said at a joint news conference with Finance Minister P Chidambaram.
Geithner said this while replying to a question on India's recent decision to open multi-brand retail to foreign investment. The other recent reforms initiative of the government include the decision to raise FDI cap in insurance from 26 to 49 percent and allowing foreign investment in pension.
The reforms, Geithner said, would lay the foundation for improving investments in the economy and ensure that "gains of those growth and investments are shared more broadly by the citizen of India".
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.
Referring to the joint meetings, Chidambaram said: "This forum has given us a much better opportunity to be able to talk to each other and understand each other. In today's meetings we discussed the global economic and financial developments".
Geithner and Bernanke are scheduled to address business leaders here and 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.
"We give importance on improving cooperation in bilateral tax matters including restructured tax treaty and implementation of Foreign Account Tax Complaint Act to address offshore tax evasion," he said.
"We have made huge progress on financial developments and reforms... We discussed ways US investors and businesses can best help contribute to India's investment and infrastructure needs," Geithner said.
The meeting also agreed to strengthen cooperation between the two countries on issues relating to illicit finance, including efforts to combat money laundering, terror financing and other financial crimes.
Chidambaram said that since India is deeply locked into the global economy, whatever happens in other parts of the world would affect India as well.
"Three working groups will meet later this afternoon. They are scheduled to discuss wide range of macro economic financial sector and infrastructure sector issues, including infrastructure financing, issues concerning money laundering and financing of terror," Chidambaram said.
Replying to queries on eurozone woes, Chidambaram said, "We have a deep interest in the crisis being resolved. We know that won't be easy ... That has affected our exports, that has affected capital flows into India".
When asked about impact of quantitative easing (QE) on India, Chidambaram said, "I raised the concern that it may impact commodity prices and commodity prices may rise.
"The US side pointed out that there has been no impact yet on commodity prices and commodity prices may not rise... that we have to wait and see if the QE revises the American economy that is good for us. If US economy grows, it will help us in our exports, it helps us in attracting more capital inflows".