US terms India key biz partner, wants it to speed up economic growth

Written by PTI | Washington | Updated: Feb 27 2013, 14:36pm hrs
Indian economyUS has termed New Delhi as one of its most trusted and valuable partners in the region. (Reuters)
The US has termed New Delhi as one of its most trusted and valuable partners in the region, but has expressed concern over India's declining growth rate and an apparent slowdown in its reform process.

During a Congressional hearing, Assistant Secretary of State for South and Central Asia Robert Blake noted that "any discussion of South Asia has to start with India", but pointed out that the its problems on the economic front threaten US's opportunities in the country.

"India is one of our most trusted and valuable partners in the region and really the foundation upon which greater regional economic cooperation and expansion will be built," Blake said.

"I think the main threat is the declining growth rate that has occurred in India, because of declining investment. And because there has been a slowdown in the economic reform efforts of, you know, over the past several years," he however added.

"It's no secret that the Indian Parliament has been tied up in knots over debates about corruption and other such things. And so very little has gotten done," he said in

response to a question from Indian-American Congressman Ami Bera.

Blake said India has passed quite an important reform to open up India for foreign-direct investment in the multi-brand retail sector, which US thinks is very important, but observed that "much more needs to be done".

"They've taken some steps to try to accelerate the approval process for foreign investment. But much more needs to be done and I think the Indians fully recognize that," the US official said.

He praised India's journey of economic development in the past 20 years during which the volume of its GDP "increased 10 times."

"What was then a closed economy is now the 13th largest trading partner of the United States in goods. And by 2025, India is projected to become the world's third-largest economy," he said.

Despite some of these problems, India remains one of the fastest growing economies in the world and it is projected to be the third largest economy in the world by 2025 , Blake noted

He said the US companies, through the US-India Business Council, have given India some important suggestions on things that could be done to open up in the areas like

banking, retail, defense and insurance.

"That would tremendously increase the levels of FDI and help boost the levels of growth in India," Blake said.

"We have a range of economic dialogues that we conduct with our Indian counterparts. So there's a number of different initiatives under way to help, again, remove some of the blockages that do occur," he said.

Observing that 80 per cent of the infrastructure required to sustain and support India in 2025 has yet to be built, Blake saw this as an "enormous opportunity" to deepen

bilateral commercial partnership through cooperation in the field of airports, power plants, water and sanitation systems and fiber optic networks.

In his remarks, Bera said the US-Indian relationship is critical and vital to the US both economically and strategically.

Chairing the hearing, Republican Congressman from Ohio Steven Chabot said the Obama Administration's pivot to Asia will not succeed unless the US does more to build stronger relationships in South Asia, and with India in particular.

"While we have seen progress in certain areas of the US-India relationship, many arenas are at a state of frustrating impasse," Chabot said.