India and the United States today agreed to deepen bilateral cooperation in the financial sector and signaled that the two sides could finalise agreements in areas like the commodities market and stock exchanges ahead of US President George Bush's visit next year.
"Both sides have identified some areas of cooperation. We need to take these discussions further. It is possible that some agreements are agreed upon ahead of the US president's visit. We are, for instance, looking at a dialogue between our commodities market regulator and the Commodities Future Trading Commission," Finance Minister P Chidambaram told reporters after the signing of a Cooperation Framework Agreement between the US Trade and Development Agency and the finance ministry.
Chidambaram said he and his counterpart, US Treasury Secretary John Snow, endorsed the discussions of the officials earlier in the day for setting goals for their ministries and regulators with special reference to capital markets, banking, money laundering, pension and insurance and infrastructure sectors.
Snow said the US commended the efforts of the Indian government towards economic growth and its policies in the finance sector. "We urge you on, as these measures have a huge potential for growth," he said, adding that there were prospects for deepening the bond market.
Snow said one of the issues that came up during his interaction with business leaders was the need to have a fast-track dispute settlement mechanism.
"One thing that may be holding back investment is the concern about the justice system... some expedited process to resolve the disputes... having such a mechanism in place would be helpful as both India and the US are members of a UN agreement that calls for arbitration in case of disputes," he said.
In response, Chidambaram said while India had a law in place, it was willing to consider suggestions for further procedural simplifications.
Snow said he had reviewed the money-laundering legislation being introduced in India, which was necessary for the capital markets.
"We also reviewed pension reforms and the insurance rules which would lift the capacity of foreign engagement in the sector," he said adding that the role of the National Stock Exchange and the commodities exchange was also discussed.
An official release said the two sides reiterated the importance of action to identify and combat terrorist financing and money laundering.
They reaffirmed their intention to implement the recommendations of the Financial Action Task Force designed to prevent the abuse of financial systems and agreed to work together to identify and freeze terrorist assets.
"While public investment in infrastructure will be augmented, the delegation discussed ways of encouraging more private financing for infrastructure projects," the release said.
The Cooperation Framework Agreement signed by the two sides today is expected to speed up the Indian government's review and approval process for the proposed activities and facilitate fresh initiatives in key sectors like energy and power, water, environment and transportation.
Currently under review are technical cooperation projects with GAIL and Neyveli Lignite Corporation in gas transport and coal mining sectors respectively, a US embassy release said.
