The U.S. and India agreed Wednesday that there is room for growth in their economic relationship, which has been hampered by the slow pace of reform in New Delhi.
The two countries need to advance negotiations on a bilateral investment treaty, reduce barriers to trade and investment, and create a more hospitable environment for companies to do business, Secretary of State Hillary Rodham Clinton said.
Indian Prime Minister Manmohan Singh, the finance minister in the early 1990s, was the architect of his nation’s economic reforms. As the head of a weak coalition government, however, Mr. Singh has had little success pushing reforms.
Mr. Krishna said he was “conscious of the fact that there is a degree of skepticism about economic content” of the U.S.-India relationship. He promised foreign investors a level playing field and transparency.
India plans to invest more than $1 trillion on infrastructure in the next five years, which will provide opportunities for U.S. companies, he added.
There is growing U.S. frustration with restrictions to foreign investment and the slow pace of economic reforms in India.
The U.S. and India are in talks to finalize a bilateral investment treaty that would accelerate investment flows, create jobs and generate growth.
On Tuesday, Westinghouse Electric Co. signed a memorandum of understanding with the Nuclear Power Co. of India Ltd. that would pave the way for construction of nuclear power plants in India’s western state of Gujarat.
The two sides also discussed terrorist safe havens in Pakistan and India’s role in Afghanistan. The U.S. wants India to play a bigger role training Afghan security forces as a NATO deadline to withdraw all its combat troops from that country by the end of 2014 draws near.
The two sides also discussed the situations in Myanmar, Syria and Iran.
On Monday, an irritant in the U.S.-India relationship – India’s imports of oil from Iran – was set aside when Mrs. Clinton granted an exemption to India from sanctions noting that it had “significantly reduced” its volume of crude oil purchases from Iran. The exemption will be reviewed after 180 days.