India becoming more important on global stage: Bernanke1 min read . Updated: 10 Oct 2012, 10:02 PM IST
US Fed chief discusses monetary policy and regulatory challenges with RBI governor D. Subbarao
Mumbai: India’s clout in global economic affairs is increasing, US Federal Reserve chairman Ben Bernanke said in Mumbai on Wednesday after a meeting with Reserve Bank of India governor D. Subbarao and other top officials of the central bank.
He was accompanied by US treasury secretary Timothy Geithner. They were on the second leg of a two-day visit to India, during which they have been meeting top officials, including finance minister P. Chidambaram.
“India is becoming more and more important in the G-20 stage," Bernanke said after the meeting at RBI. “We discussed monetary policy and regulatory challenges, banking issues, the global economy."
India had on Tuesday expressed its concern that the US fiscal stimulus programme may raise commodity prices, while the US wanted India to lower trade and investment barriers. Those discussions took place in New Delhi on the first leg of the visit.
Chidambaram said Tuesday after the meeting that India was worried about the third round of quantitative easing in the US boosting commodity prices. The move could however also mean more capital flows into India, he said. “But we need to balance both the advantages and disadvantages," Chidambaram said.
Geithner had welcomed the Indian government’s recent steps to open up the economy and sounded optimistic about a recovery in the US.
“The reforms outlined by the government of India offer a very promising path to improving growth outcomes for the Indian economy," Geithner said Tuesday of the measures allowing foreign investment in multi-brand retail and lifting the cap on overseas investment in insurance. India has moved to allow greater foreign investment in broadcasting, aviation, insurance and pension funds. The government also raised diesel prices and curbed the supply of subsidised cooking gas to pare its fiscal deficit.
On Tuesday, the two sides discussed India’s investment needs in infrastructure and improving coordination on bilateral tax matters, besides the possibilities for directing Indian investments into the US and US investments into India, Geithner said.