US may seek India's support in its currency dispute with China
NEW DELHI: India and the United States will announce a strategic economic and financial partnership initiative on Tuesday in a attempt to step up their bilateral engagement. The visiting US treasury secretary Tim Geithner is also expected to seek India's support in the country's ongoing currency dispute with China.
"Indo-US economic and financial partnership will take the bilateral relationship to a strategic level," an Indian finance ministry official said. However, the official did not elaborate on whether India will lend its support on the US-China currency issue.
US Treasury on Saturday delayed an April 15 report to Congress on whether China manipulates its currency Yuan, pledging to work instead with Group of 20 members - India and China included - to persuade Beijing to de-peg its currency from the dollar.
Indian rupee has appreciated sharply in the recent months but the tightly controlled Chinese Yuan has barely moved. This has undermined India's export competitiveness. India has, however, not raised the currency issue but instead pointed out to the over $20 billion trade surplus China has with India and the need to correct the same.
The official said that the focus of the meeting between Indian finance minister Pranab Mukherjee and Mr Geithner will be largely on the economic and financial partnership. The partnership will focus on deepening cooperation between the two nations on macro-economic, financial and infrastructure sector.
At present, US has such a partnership with select countries, the most recent one being China. This partnership, after the nuke agreement, is being touted as the next level of engagement in the bilateral relationship between the two countries. The discussions will be carried forward to greater depth through a number of working groups including officials from both the countries. The idea will be to give a new impetus to the financial and economic forum for an extensive engagement.
Bilateral issues such as tantalization agreement that will allow Indians working to bring their contributions to US social security back, negotiations on investment agreement and multilateral issues including discussions on issues at the G-20 forum could also figure in the discussions at the meeting of the joint working groups.