US treasury representative to sit in Mumbai

The US treasury department has decided to post a full-time treasury representative in India as it considers the south Asian country to be a "critical financial centre".

The decision to place a full-time representative in Mumbai by the US treasury department, the third such appointment after Tokyo and Beijing, reflects the importance the US accords to India's growing economic power.

"It is an indication of how important we consider India's role in the global financial sector. It is (also) important for building stronger economic ties with India," said Timothy D Adams, under secretary for international affairs at the US treasury department.

Adams was speaking to reporters at the American Centre here after a meeting with the Reserve Bank of India top brass. He will also be travelling to Kolkata and Hyderabad as part of his three-leg visit to India.

In its mission statement, the treasury department states that in the international arena, it works with other federal agencies, governments of nations, and international financial institutions to encourage economic growth, raise standards of living, and predict and prevent, to the extent possible, economic and financial crises. The treasury department's national role is that of a steward of the US economic and financial systems.

Adams said India was an important economy from the standpoint of trade and financial flows and having a full-time representative of the treasury department will help "understand and appreciate all the changes that are happening here."

The department is winding up the office of full-time representative in Argentina, as the Latin American country has come out of a financial crisis.

"We will now be having full-time representatives in key financial and economic centres. We will next be going to Brazil," he said.

During his interaction with senior officials in RBI , Adams discussed the central bank setting up a panel headed by former RBI deputy governor, S S Tarapore, for moving to a fuller rupee convertibility. "It (naming of a committee) certainly is a worthy topic. I applaud the government (for taking the step). It is a good step in the process of realisation of (India's) full economic potential," he said.

He also stressed that India needs to further deregulate its financial services sector including pensions, insurance and banking.

He argued that greater foreign investment in financial services will increase the types of and access to financial services. The stationing of a representative in India will help understand better the thoughts that go into policies and operation of reforms of policy, Adams said.