US urges India to step up economic reforms

FE Team | Published: October 26, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

WASHINGTON, Oct 25 (AFP): US Treasury Secretary Henry Paulson yesterday called on India to accelerate its pace of economic reforms, ahead of his visit next week to the Asian powerhouse.
"It is in the best interest of India, the United States and the world for India to continue, and even accelerate, the pace of economic reform and openness," Paulson said in a speech here.
He noted that the Indian government is looking to the private sector to fund up to one-third of the nearly 500 billion dollars in investment needed over the next five years to build physical infrastructure.
"The government can do more to encourage this private investment by establishing more hospitable investment, regulatory and financial regimes," he said.
"Capital limitations, combined with on-going uncertainty about contract enforcement and regulatory consistency, will make infrastructure investment more difficult to obtain."
The Treasury chief also said he would speak to Indian government officials about the crucial need to complete the Doha Round of international trade negotiations, launched by the World Trade Organisation six years ago with an intent to promote the developing world.
"Working together to successfully conclude a Doha agreement will be the single most effective thing we can do to help raise living standards in India and around the world," he said.
"A Doha agreement is within reach, and the potential is so great, that we must not let it slip through our grasp."
India and Brazil head the Group of 20 developing countries which is pressing the United States and the European Union to further open their markets to the agricultural products of the low-income world.
The farm issue is a key roadblock to a successful conclusion of the WTO talks. The US and the EU are calling for developing countries to allow greater access for their manufactured goods in exchange for reductions in farm subsidies and duties.
Paulson kicks off the visit Sunday in Kolkata where talks are set with West Bengal Chief Minister Buddhadeb Bhattacharya and local business leaders.
He will then travel to Mumbai where he will deliver remarks Monday to the US-India CEO Forum Infrastructure Conference and meet with officials including Reserve Bank of India Governor Y.V. Reddy.
"At that conference and afterwards, we will highlight the opportunities of India's infrastructure initiatives to US businesses," Paulson said.
From there, he travels to New Delhi where he will participate in a discussion at the Fortune Global Forum. He will also meet with government leaders including Finance Minister Palaniappan Chidambaram.