Mukherjee, Geithner aim for complementary growth

As Defence Minister, he inked a game-changing defence pact with the US, as Foreign Minister, he signed the historic India-US civil nuclear deal and now as Finance Minister, Pranab Mukherjee is all set to put India and the US on the path of a "strategic economic" relationship.

This strategic economic relationship would not be of competition, unlike that with other countries, but would be complementing the growth and development of each other, officials familiar with the talks between the two largest
democratic countries of the world said.

Pranab Mukherjee, who arrived here on Monday to attend the second annual meeting of the India-US Economic and Financial Partnership, is all set to lay the groundwork for a new era of trade and economic partnership with the United States, officials said.

Though no formal agreements or memorandum of understandings are to scheduled to be signed during the day-long talks, officials asserted that the indications so far are that the talks could result in a path-breaking economic
relationship between the two countries, following in the footsteps of what Mukherjee did to the India-US relationship when he was the country's Defence Minister and then the External Affairs Minister.
 
This is the first time that an Indian Finance Minister is travelling to the United States with half a dozen top officials -- Governor of the Reserve Bank of India D Subbarao, Secretary of Economic Affairs R Gopalan, Secretary of Financial Services Shashikant Sharma, Chairman of the Securities and Exchange Board of India U K Sinha; Chairman of the Forward Market Commission B C Khatua and Chief Economic Advisor Kaushik Basu.

In an unprecedented gesture, the Obama Administration too has lined up its top financial and economic officials. Led by Treasury Secretary Timothy Geithner, who spent most part of the first 20 years of his life in India, the other top US officials to attend the Second Annual US-India Economic and Financial Partnership include Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro, US Commodity and Futures Trading Commission Chairman Gary Gensler, Federal Deposit Insurance Commission Vice-Chairman Gruenberg and National Economic Council Director Gene Sperling.

"The comprehensive inter-agency representation on both sides makes this the highest-level economic meeting ever between our two nations, demonstrating the vision and commitment in both countries for ever-deepening economic
partnership," a senior Treasury Official said.

Ahead of the talks, Geithner and Mukherjee made a joint appearance at a panel discussion organised by the Confederation of Indian Industry and the Brooking Institute.

Geithner said the growth of India was not posing any danger to the United States. In fact it complements the growth and economic
development of the US. Geithner later hosted a dinner for Mukherjee, which was attended by officials from both sides.

"We will discuss in detail how to expand relationship between India and the US and also the other issues on which we share common perception. One of the fundamentals principles of our relationship is that we share many common values," Mukherjee said at the CII-Brookings panel discussion.

"The two largest democracies of the world are now engaged not only in strategic partnership but also to expand their relationship in various international fora, particularly G-20, which has emerge as an important fora to address the problems of the world economy. We have taken certain major steps in these fora," Mukherjee said.

Geithner said the Obama Administration views this relationship as having enormous potential.

"I think we are just at the very beginning of unlocking the great potential of this economic relationship. We are going to spend our time in talking about a list of the most important challenges and opportunities between us," the
Treasury Secretary said.

"Obviously as we always do, we would talk about the global economy, the risk and challenges ahead and talk a little bit about economic developments in the United States and India. But our main focus is to look forward and expand
and strengthen the economic and trade and industrial relationship," Geithner said, setting the agenda of the talks for Tuesday.

Mukherjee is also scheduled to meet Secretary of State Hillary Clinton at the Foggy Bottom headquarters of the State Department.

Geithner and Mukherjee would also have lunch with US and Indian CEOs on the sidelines of the meeting.

There will be separate working group meetings on macroeconomic policy, access to finance by small business and infrastructure finance at the sub-Cabinet level held on Tuesday afternoon at the Treasury.

Senior Treasury officials explained that the Obama Administration has a strong interest in ensuring that both economies reach their full growth potential.

"At current growth rates, India could become the third largest economy in the world by 2030. In fact, the Indian government has ambitions to raise India's growth rate to double-digit levels. Faster Indian growth clearly benefits
Indian citizens. But India's growth also benefits those, including the United States, who trade with and invest in India," the official said.

In fact, officials point out, India and the US have made significant progress in bilateral economic relationship since Geithner and Mukherjee first launched the partnership in India in April, 2010.

The US Treasury and Indian Ministry of Finance have met numerous times at the working group level and twice at the sub-Cabinet level to focus on policy coordination and capacity building over the past sixteen months. The partnership discussions on Tuesday will build on that momentum and focus on three broad areas -- macroeconomic policy, financial sector reform and development and infrastructure finance.