Geithner eyes US access and financial reforms

Written by Reuters | Washington | Updated: Jun 29 2011, 06:42am hrs
India has outgrown its financial system, US treasury secretary Timothy Geithner said on Monday, calling for cooperation on reforms that would deepen the country's capital markets and allow US firms more access to them.

Geithner, speaking at a business forum with finance minister Pranab Mukherjee, said India's future growth largely depended on the "next wave" of financial reforms. The two finance ministers and their top officials will participate in annual economic talks in Washington on Tuesday.

"I think from our perspective, the most important thing we did like to see is progress on financial reforms that provide a deeper, more liquid market for corporate debt for infrastructure financing, that allow a little more access of American companies and their technology in the financial area," he said. "Our interests are pretty complementary as a whole."

The second installment of the US-India Economic and Financial Partnership talks, launched last year in New Delhi, are not likely to stir acrimony. The two democracies, both powered by domestic-led growth with market-driven currencies, have many common goals. "If you look at this relationship, one of the things that's so encouraging about it is the relative absence of drama," Geithner said.

Last month, the US and China held much more controversial bilateral talks, sparring over currency policies, human rights and US high-technology exports.

The US wants to make India one of its top 10 trading partners in coming years. Currently, bilateral trade between the two countries is about $49 billion annually, just over a tenth of the $456 billion annual US-China bilateral trade.

Mukherjee said reforms in India were "a constant exercise" and pledged that the country would press forward with its reform agenda and the legislation that would enable it. He also acknowledged that India faced serious inflationary pressures and was acting to contain them. He added that while the country "could live with" inflation running at an annual pace of 6% to 6.5%, the level this year may be higher because of high oil prices.