"Untapped Potential" for Expanded U.S.-India Trade, Geithner Says
By Stephen Kaufman
Staff Writer
Washington - President Obama hopes to see India become one of the top 10 U.S. trading partners, and Treasury Secretary Timothy Geithner said there is "vast untapped potential" in the economic relationship between the two countries. Geithner urged India to make economic and financial reforms to attract more investment.
In a June 28 statement released at the conclusion of his meetings with Indian Finance Minister Pranab Mukherjee at the 2011 U.S.-India Economic and Financial Partnership in Washington, Geithner said India's economic growth is good for the United States and American growth also benefits India.
"We aren't just watching India's rise as an economic power, we support it. We encourage it. And we want to help advance it," he said.
Between 2000 and 2010, India's exports to the United States grew by nearly 180 percent, while U.S. exports to India increased more than four times, he said. The decade also saw India rise from being the 25th-largest trading partner of the United States to its 12th-largest. Between 2005 and 2009, the combined bilateral U.S.-India foreign direct investment also grew by nearly 165 percent.
Both countries are benefiting from the increase in economic ties. Geithner said that when President Obama visited India in November 2010, he learned how "American-manufactured solar cells are helping move Indian cell towers off diesel generators and how a drug discovery technology invented and manufactured in the U.S. is helping find new cures in India for deadly illnesses, including dengue."
But Geithner urged the Indian government to make more financial and economic reforms that will increase investment and offer long-term benefits.
"American companies still face barriers in India in sectors such as banking, insurance, manufacturing, multibrand retail and infrastructure. Easing those barriers, which are limiting economic growth and job creation in both our countries, would be an important step toward integrating our economies," he said.
"The Indian government recognizes that to realize its aspirations of strong growth, it will need to attract sufficient investment, both from abroad and domestically. India will need to advance pending economic and financial reforms to make this possible," Geithner said.
Geithner and Finance Minister Mukherjee signed a joint statement June 28 in which they said India and the United States share both a vision and a commitment to "expanding economic opportunities for our citizens through greater trade and investment."
In the statement, the United States said it is committed to maintaining and enhancing its competitiveness in the global economy, and pledged to make investments in the necessary technology, skills and infrastructure. India said it will take steps to "marshal private and public savings" to meet the infrastructure needs of its rapidly growing economy.
Both countries pledged to "work together to expand trade and investment links between our two economies, and to develop and strengthen our financial systems," as well as cooperate in the Group of 20 leading industrialized and developing nations forum on "an effective mutual assessment process to bring about strong, sustained, and balanced global growth."
The statement said that during the upcoming year, the United States and India also plan to have deeper engagement over macroeconomic challenges such as growth, unemployment, inflation and commodity prices, as well as financial sector reforms and infrastructure finance strategies.
(This is a product of the Bureau of International Information Programs, U.S. Department of State.)
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