New Delhi: India on Tuesday discussed with the US administration the Federal Reserve’s latest quantitative easing programme that seeks to boost the sluggish US economy.

Finance minister P. Chidambaram told reporters that India discussed with visiting US treasury secretary Timothy Geithner its concern that the fiscal stimulus programme might impact commodity prices. But it could also mean more capital flows into India, he said.

Geithner was in New Delhi for the third economic and financial partnership dialogue between India and the US.

“Quantitative easing may impact commodity prices," Chidambaram said. But “it’s possible that some of the money may come to India."

The minister added that the programme, initiated in September, had not yet started to impact commodity prices.

Despite a tight monetary policy stance, India’s wholesale price inflation accelerated to 7.55% in August from 6.87% in the preceding month.

The US and Europe are the two major exporting markets for India.

In his remarks, Geithner welcomed the Indian government’s recent steps to open up the economy, with measures to allow foreign investment in multi-brand retail and by easing the cap on foreign investments in the insurance sector.

The two delegations discussed India’s investment needs in infrastructure and possibilities for directing Indian investments into the US and US investments into India, Geithner said.

Geithner and Ben Bernanke, chairman of the US Federal Reserve, are in India on a two-day visit. They are scheduled to meet key policy makers including India’s central bank governor D. Subbarao and industry leaders in Mumbai.

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