U.S. – INDIA TRADE: Gets a boost with Geithner’s visit

TRADE RELATIONS AT HIGH POINT

US Treasury Secretary Timothy Geithner has begun his first visit to India since assuming office. Speaking in Delhi, he praised the way India had handled the global financial crisis and said the US and India should “work more closely together”.

Mr Geithner was in India to inaugurate a bilateral financial partnership with Finance Minister Pranab Mukherjee. It will focus on infrastructure, financial investment and economic stability, US Treasury officials say.

Mr Geithner is also expected to press India to open its highly regulated markets to US investment. The US argues that more open Indian markets would help make it easier and cheaper for India to access capital, which in turn could help finance the country’s growing infrastructure needs.

It is a case that Mr Geithner is also likely to make on Wednesday when he visits Mumbai, India’s business and financial capital, where he will meet both Indian and US business leaders. Throughout the trip, Mr Geithner will be accompanied by other treasury officials and Donald Kohn, vice-chairman of the board of governors of the Federal Reserve.

It will be a meeting of the world’s biggest economy and the world’s biggest democracy, as the US and India look to deepening economic ties and bilateral relations. Officials have said that the goal of this visit is to establish a “robust” dialogue between the two countries. However, some analysts have suggested that this trip is about symbolism, aimed at establishing a parallel with the US-China relationship. The US already has a standing dialogue with India’s fellow emerging Asian giant, China.

Trade between the United States and India has more than doubled in the last five years, but the US is no longer India’s biggest trading partner. Instead, China currently holds the number one position, followed by the UAE and then the US.

Total bilateral goods trade between India and the US was worth around 40 billion dollars in 2008. This is still significantly lesser than US trade with other countries like China and Europe.

The newly formed US-India Economic and Financial Partnership was announced by President Barack Obama last November, when he honoured Indian Prime Minister Manmohan Singh with the administration’s first state dinner.

At present, US-Indian relations are at a high point.