US treasury secy seeks more FDI in infrastructure

The US treasury secretary, John W Snow, said on Tuesday that India's infrastructure needs demanded that the Indian authorities allow much greater access to foreign investments in the country's financial sector.

The potential for infrastructure - highways, power, housing, ports and airports - is huge, but its longer term financing needs can only be met by pension, insurance and banking institutions, said Snow during an interaction with reporters at the US consulate here.

On the increased participation of foreign direct investment (FDI) in the financial sector, he said, "The financial sector is the nerve centre of any economy. We want to engage business leaders, political leaders and economic power centres." Further on he added that it will also be in India's interest to allow FDI in retailing.

Another issue that the US wants to take up with India is the slow judicial process. The current system would take a long time to resolve potential disputes. India can have a faster commercial arbitration process for time-bound resolution of disputes and remove the uncertainty about the time taken.

Snow had a meeting with the Reserve Bank of India (RBI) governor Y V Reddy in the morning and later visited the stock exchanges and a commodity exchange.

Yesterday, he met CEOs of private equity funds present in India and also the Indian side of US-India CEO group. The group will submit a report to the Indian Prime Minister Manmohan Singh and US President George W Bush for their meeting probably scheduled next year.

The report would contain recommendations and ideas for greater cooperation between the two countries.

He said that the differences between the two countries were small compared to the agreements, when asked about the disagreements in the World Trade Organisation (WTO) on farm subsidy issues. He said that the US trade minister will be in India later this week.

Snow said, "We are here as friends of India. We want to support India's success. India is emerging as one of the great economic powers of the world.

The global economy needs high growth rates in countries like India to iron out the global imbalances."

"Your growth is helping us," the visiting US treasury secretary said, adding, "India and China should be taking more responsibility for global economy. We welcome India and China to the G-7 meets. Both the countries need to participate in the discussions on the world economy."

Snow concluded his 2-day visit to Mumbai today and would be in New Delhi tomorrow.