India and the US on Tuesday agreed to work closely to tackle macro-economic issues and tax evasion. The two countries also opened new dialogues on infrastructure financing and financial sector reforms under the US-India Economic and Financial Partnership.
Calling the Indian economy a ?promising, rapidly expanding? one, visiting US treasury secretary Timothy Geithner said the country’s ?economic success? in the last 15 years has been remarkable. In a joint presser with finance minister P Chidambaram, Geithner said India’s recent economic reform measures would help create the foundation for stronger economic growth.
Importantly, he seemed to recognise the Indian government’s policy paradigm of ?inclusive growth? as he said the domestic reforms and well as the cementing of India-US economic ties would spur trade and investment flows between the two countries. The reforms, Geithner said, would 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 the US-India Economic and Financial Partnership
Among others, the meeting was also attended by RBI governor D Subbarao. Three working groups have been formed between the two sides on macro-economic issues, infrastructure financing and financial sectors.
Chidambaram said the visiting US side was of the view that commodity prices might not see any significant rise because of the latest round of quantitative easing by the US federal reserve.
Even if commodity prices rise, the increase would be in dollar terms and not so much in rupee terms if the latter appreciates further, Chidambaram noted.
Chidambaram said in the upcoming meetings of the International Monetary Fund and the World Bank Group in Tokyo during October 11-13, he would be keen to know from the European finance ministers what they planned to do to address the euro zone crisis. ?We will encourage them (European leaders) to find a way out…as all emerging markets including India have already been impacted by the crisis.?
