Joint Statement India - U.S. Financial and Economic Forum
August 23, 2006
At the invitation of U.S. Treasury Under Secretary Timothy D. Adams, Indian Ministry of Finance Department of Economic Affairs Secretary, Ashok Jha, led an official delegation to Washington to co-chair the sub-cabinet meeting of the India-U.S. Financial and Economic Forum, which is part of the broader U.S.-India Economic Dialogue. The delegations discussed a number of key issues including developments in the global economy, policy responses to high oil prices, U.S. and Indian leadership in the WTO Doha Development Round negotiations, strengthening India’s physical and financial infrastructure, and collective efforts to combat money laundering and the financing of terrorism.
Besides senior officials from the Ministry of Finance, Government of India and the U.S. Treasury Department, representatives from the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, U.S. Securities and Exchange Commission, National Association of Insurance Commissioners, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Reserve Bank of India, and the Securities and Exchange Board of India, participated in the discussion.
In the meeting, the discussions focused on:
Global Economic Issues
The delegations discussed a range of issues facing the global economy. They noted that global growth remains exceptionally robust, the highest in three decades, despite continued high oil prices. The Indian economy remains strong, driven by domestic demand. Growth in the U.S. remains solid, in part due to sustained productivity growth, and fiscal consolidation is ahead of schedule. The two sides noted risks to the global economy which include the impact of sustained high oil prices and a disorderly adjustment of unbalanced growth in many parts of the world. India and the United States reiterated that a successful conclusion of the WTO Doha Development Round negotiations remains essential to promote global trade and growth.
Financial Sector and Infrastructure Issues
The delegations discussed the role of sound financial institutions and efficient financial markets in mobilizing savings and allocating resources efficiently to generate growth and help alleviate poverty. Both sides highlighted the important role that foreign direct investment can play in strengthening the productive base of the economy. The two sides discussed the role of financial sector development in stimulating resources for long-term financing.
U.S. officials discussed recent developments in the U.S. banking industry, as well as regulatory approaches to complex financial transactions and risk management. The U.S. side also emphasized the contribution of financial sector liberalization to growth and stressed the gains that could be achieved by greater foreign participation in the banking, insurance, and pension sectors, and in capital markets. The Indian side described the recent steps taken to liberalize the banking and insurance sectors and emphasized the importance of a calibrated, gradual approach to these issues, consistent with their overall policy objectives.
Indian officials affirmed their commitment to infrastructure development as a means of reducing poverty and expanding economic opportunities. They acknowledged the importance of encouraging private financing for infrastructure to complement public expenditure. Key components include an improved investment climate, financial sector development to enhance long-term financing, and improved project design.
The two sides acknowledged the importance of actions to detect and disrupt money laundering and financing of terrorism. They discussed implementation and enforcement of anti-money laundering laws within the financial sector. The delegations agreed to continue to work together to identify and freeze terrorist assets.