The India – U. S. Financial and Economic Forum

Washington, D.C.
April 17, 2000

As outlined in the Statement "US - India Relations: A Vision for the 21st Century" issued by the Prime Minister of India and the President of the United States of America on 21st March 2000 at New Delhi, the Government of the Republic of India and the Government of the United States of America agree to establish a joint forum on economic and financial matters to be known as the "India - United States Financial and Economic Forum" (the "Forum").

This Forum is an element of a broader economic and commercial dialogue between the two Governments. The Terms of Reference for the Forum are as set forth below:

Terms of Reference

These Terms of Reference are intended to provide a general framework for the Forum in order to facilitate regular discussion of issues surrounding financial sector developments, investment, and macroeconomic policy. The objective of the Forum would be to strengthen the financial and economic relationship between India and the United States through regular contact between economic policymakers from each country. In general, the Forum will take place through government-to-government meetings led by the Finance Minister of India and the Secretary of the Treasury of the United States, and will include representation from both governments.

It is anticipated that there will be a Cabinet level meeting each year at which the Indian Finance Minister and the United States Secretary of the Treasury will meet to discuss recent financial and economic developments, progress since the previous Cabinet level meeting, financial or economic issues of mutual concern, and priorities for future meetings. This Cabinet level meeting would take place at a convenient time and place that could be in conjunction with other bilateral or multilateral meetings. The Indian Finance Minister and the United States Secretary of the Treasury may also agree to send a joint report on the Forum's deliberations to their Heads of Government prior to the annual Heads of Government meeting described in the Clinton-Vajpayee Joint Statement of 21st March 2000.

The Cabinet level meetings would be supplemented by sub-Cabinet level meetings that would generally be held on an annual basis and involve, as appropriate, the participation of the Securities and Exchange Commission of the United States, Federal Reserve System of the United States, United States Office of the Comptroller of the Currency, United States Council of Economic Advisors, and other officials of the United States Government, and the Securities and Exchange Board of India, Reserve Bank of India, and other officials of the Government of India. It is anticipated that the topics set forth in the annex will form the basis of discussions at these sub-Cabinet level meetings.

The Forum will be reviewed two years from the date of the signing of this document. At that time, the governments may consider whether the dialogue fostered by the Forum has been useful and whether it should be continued.

Done at Washington, D.C., on this 17th day of April 2000.

Yashwant Sinha
Finance Minister
Republic of India

Lawrence H. Summers
Secretary of the Treasury
United States of America

Annex

The sub-Cabinet level meetings, it is anticipated, will focus on the following:

Financial Sector

(a) strengthening and development of financial services through mutual exchange of experiences;

(b) issues relating to the integration, broadening, and deepening of capital markets in the two countries;

Macroeconomic and Investment Issues

(a) domestic economic developments and growth prospects in each country, including fiscal and monetary policies and the effectiveness of each in ensuring sustained growth;

(b) improving the investment climate consistent with the investment policies of the two countries;

(c) structural reform, including strategies to expand the social safety net;

(d) external economic issues, including the external accounts in each country, bilateral trade issues, investment flows, debt, and exchange rate policy;

(e) respective country positions o n major economic issues under discussion in international financial institutions.

(Note: The Indian Finance Ministry and the United States Treasury Department will agree on specific agenda items and a roster of prospective participants before the meeting convenes.)