US seeks India help to rebalance global growth

The United States and India must work together on rebalancing global growth and revamping a battered financial system, US Treasury Secretary Timothy Geithner said in New Delhi after meeting the Prime Minister and the Finance Minister. The US and India need to work more closely together, Geithner said. He was in New Delhi to launch a new bilateral economic dialogue with India with a focus on macroeconomic stability, financial markets and infrastructure financing. He was accompanied by Federal Reserve Vice Chairman Donald Kohn.

"Our ability to cooperate on economic and financial issues will be critically important to the success of global efforts to create conditions for a more stable global financial system, more balanced global economic growth, more effective and representative international financial institutions, and a more open global trading system," the US Treasury Secretary said.

On the prospects for the US economy, he said that while unemployment remains unacceptably high, the private sector has added jobs during four of the past five months, private investment is increasing, productivity growth is very high, the financial system is recovering, private savings have improved.

On India, Geithner said that it has a dynamic entrepreneurial private sector, a demonstrated ability to compete in the global market, and a commitment to quality higher education. "With those strengths and the proposed reforms, India's economic growth, already impressive, will be even stronger in the future," he added.

The US Treasury chief also approved India's demands for more representation for developing economies in the World Bank and IMF, saying they needed to be more effective and representative. Geithner also pledged to work through the Group of 20 (G20) and other multilateral groups to achieve more flexible currency policies that can smooth out trade flows and reduce imbalances.

Meanwhile, the Indian Government invited US investors to boost its creaky infrastructure as part of the efforts to deepen economic engagements with the world's biggest economy. "Immense opportunities are there for investment in the infrastructure sector. As much as US$600bn can be invested in ports, telecommunications, roads in the next five years," Finance Minister Pranab Mukherjee said while launching the India-US Financial and Economic Partnership along with Geithner.

The Government's discussions with visiting US Treasury Secretary and other officials included fiscal and monetary policy, the Finance Minister said. Officials from the two countries promised to meet regularly to discuss macro-economic issues, their financial industries and how to pay for infrastructure improvements in both countries.