New Delhi: India invited US companies to invest in developing its infrastructure on Tuesday as treasury secretary Timothy Geithner and Indian leaders launched an effort to expand economic ties.
Geithner met with Prime Minister Manmohan Singh and took part in the first meeting of the US-India Economic and Financial Partnership to promote trade and investment. The initiative is part of the Obama administration’s efforts to forge closer relations with India, a fast-growing economy, the most populous democracy and a stable ally in a complex region.
“Deepening our ties with India is critical to the broader global effort to develop a framework for strong, sustainable and balanced growth and will facilitate more trade, investment and job creation in our two countries,” Geithner said at a news conference with his Indian counterpart, finance minister Pranab Mukherjee.
Mukherjee said US companies were invited to invest in projects in ports, roads and telecommunications, which he said could absorb up to $600 billion in foreign investment over five years.
“These are vast areas,” he said.
The vice chairman of the Federal Reserve, Donald Kohn, and other officials are traveling with Geithner on the two-day visit.
US-Indian relations are at a high point, thanks partly to the Bush administration’s push to allow US civilian nuclear trade with India. The Obama administration has used that as a foundation for improving ties and hopes of cooperation on Washington’s priorities of combating terrorism and climate change.
The Indian government, elected last year to a second five-year term, says development of roads and other infrastructure is a priority and it plans to spend Rs1.7 trillion ($37.9 billion) on it in the next fiscal year.
Indian highways carry nearly three quarters of freight and passenger traffic. Government plans call for building 7,000 kilometers (4,400 miles) of highways a year to serve its booming growth. India allows 100% foreign investment in road development.
Geithner’s visit started with a stop at a store in the capital, New Delhi, that offers mobile banking services, highlighting steps to expand Indians’ access to financial services. He spoke briefly to a street vendor who irons clothes and is a customer of the mobile banking shop.
India’s economy has surged in the past decade and is the second fastest-growing major economy after China.
India is a member of the Group of 20 nations, which brings together the wealthiest industrial countries and major developing economies such as China, India and Brazil. The G-20 was designated by President Barack Obama and other leaders at a summit last September in Pittsburgh as the top policy-setting group for the global economy.
On Wednesday, Geithner is due to travel to Mumbai, and meet with Indian entrepreneurs and chief executives of leading companies.