India's Finance Minister Nirmala Sitharaman speaks as US Treasury Secretary Steven Mnuchin watches during a joint news conference in New Delhi (Photo: Reuters)
India's Finance Minister Nirmala Sitharaman speaks as US Treasury Secretary Steven Mnuchin watches during a joint news conference in New Delhi (Photo: Reuters)

US Treasury Secretary confident that India can achieve $5 tn target in 5 years

  • Steven Mnuchin on Friday said that US is conscious of India's huge energy needs and both countries are working towards it
  • Mnuchin was in New Delhi leading delegations to participate in the 7th Indo-US Economic and Financial Partnership meeting with Nirmala Sitharaman

New Delhi: The US Secretary of Treasury Steven Mnuchin exuded confidence in Prime Minister Narendra Modi’s target to achieve $5 trillion economy in the next five years and is hopeful of the economic opportunities in the country as India promotes growth.

“I look forward to the government’s goal of $5 trillion and I think they (India) will hit the goal (of $5 trillion economy) faster than they expect," Mnuchin said after meeting finance minister Nirmala Sitharaman for the 7th Indo-US Economic and Financial Partnership (EFP) Dialogue in New Delhi.

“We are working together to promote growth and improve economic security in both of our countries," Mnuchin said, adding that the US is looking forward to opening up of certain markets in Indis, where US companies can continue to invest in.

Mnuchin’s comments come a day after government data showed that the core infrastructure industries’ output—measuring a basket of eight sectors accounting for two-fifth of India’s factory output—contracted to the lowest in at least 14 years, pointing to a deepening industrial slowdown. India’s gross domestic product growth (GDP) grew at its slowest pace in six years at 5% in the quarter ended June.

To address concerns related to economic growth, the government in the last two months has announced a slew of measures, including a deep cut in corporate tax, to counter a severe demand slowdown and slump in private investment.

Sitharaman said that India and the US discussed policies to stimulate economic growth, while discussing the recent steps taken by Indian to boost growth, which includes recapitalization state-owned banks and plans to merge some of them. Besides, there were also discussions on capital flows, investment promotion related issues, and the external economic environment.

“During this meeting, both sides had in-depth exchanges of views on a range of issues such as the global, US, and Indian economic outlooks, global debt sustainability, financial sector reforms, leveraging of capital flows and investment, and tackling money laundering and combating the financing of terrorism," according to the joint statement issued by the countries. Besides, both the countries briefly touch on expanding trade relations between both the countries, Mnuchin said.

He further said that the US is working with its allies to make sure that there is significant supply of oil in the market to offset the Iran sanctions.

“We are sensitive to the fact that India has tremendous energy needs. We look forward to working with India on LNG and expanding our capability. We had productive discussions on that," he told reporters.

India stopped crude oil imports from Iran on 2 May after the US sanctions. Last year, US President Donald Trump had walked out of the 2015 Iran nuclear deal, signed between Iran and six countries representing the international community. India, which says that it only recognizes United Nations-mandated sanctions and not those imposed by specific countries, has been adhering to the US sanctions as they target public and private companies doing business with Iran.

India and the US plan to work together to attract more private sector capital to finance India’s infrastructure needs. They also plan to collaborate to address the challenges to global growth under the G20 Presidency of Saudi Arabia. “As India gears up for the 2022 Presidency of the G20, the United States stands ready to support India in hosting a successful and focused Presidency," the statement said.