(Archived Content)
JS-2136
I just completed a five day visit to India, which included stops in New Delhi, Bangalore and Mumbai. The purpose of my visit was to pursue my government's commitment to economic engagement with India under the U.S.-India Economic Dialogue.
During this trip, I gave a speech at the World Economic Forum in New Delhi on India and its role in the global economic expansion. In addition, I visited several development projects in Uttar Pradesh, as well as a high-tech center in Bangalore. I also met with national and state-level financial officials, representatives of international financial institutions, and numerous business officials, including members of India's financial sector.
In my discussions with public officials, I emphasized the priority that our government places on establishing closer ties with India in the context of the U.S.-India Dialogue. I was very pleased by the level of enthusiasm expressed by India's economic leaders with respect to the adoption and implementation of India' new economic reform agenda. I am looking forward to release of the detailed plan outlining this agenda in the coming months. In addition, I welcomed their focus on the private sector, particularly the decision to create an investment commission in which prominent Indian business leaders will provide input on investment climate reforms.
During many of my meetings with economic and finance officials, we discussed the goal of India's new government to generate sustainable growth rates of 7-8 percent. I conveyed my government's strong support for this objective. We also discussed the kinds of reforms that can ensure that benefits of growth are extended to those who remain in poverty, and explored how the US-India Economic Dialogue can be supportive of this effort.
In this context, I stressed the importance of productivity growth, which will need to double in order to generate 7-8 percent growth. I commended the Government for its focus on second-generation reforms in support of this objective, such as tax reform and efforts to increase foreign direct investment in India.
I had the opportunity to see what the private sector can offer during a visit to farms and villages in Uttar Pradesh, where the introduction of new technology has led to substantial increases in output and incomes for farmers. I also learned about the contributions that the financial sector is making to support higher living standards. For example, I was very impressed by ICICI, a private bank that is providing a range of financial services to rural areas for the first time. Also impressive is the success of banks in dramatically lowering the cost of remittances in India. In addition, I learned about the benefits of new computer terminals in rural areas that provide information about prices of commodity futures, which is helping inform decisions on crop production.
I was impressed to hear about new efforts at the state level to combat fiscal problems. I discussed one plan in detail with officials in Karnataka who are working to eliminate their budget deficit and improve management of public finances with assistance from the Agency for International Development and the World Bank.
In the future, I am looking forward to working with India in the Doha Development Round. Further trade liberalization will be another important growth stimulus for India and other emerging markets.