Snow to urge larger foreign role in India

Snow to urge larger foreign role in India

Glenn Somerville, Reuters/Mumbai

U.S. Treasury Secretary John Snow will be aiming to nudge India
ahead on reforms, including greater scope for foreign ownership
in financial services, as he begins a four-day visit on Monday.

Snow's trip, which takes him from Mumbai, the financial center
of Asia's third-largest economy, to the capital New Delhi,
extends a series of visits to countries the U.S. Treasury sees as
having a vital role in shaping the global economy in the future.

India, with its thriving service sector that is already
drawing U.S. jobs away through outsourcing that takes advantage
of its educated, cheaper labor force, is seen as a regional
leader with considerable influence in advancing the drive towards
free trade.

"India is a stop along the way toward visiting all those
countries -- including China and Brazil which we visited earlier
-- that we regard as having the potential to become the major
economies of the 21st century," Treasury Under Secretary for
International Affairs Tim Adams said ahead of the visit.

Adams said in September, before finance ministers from the
Group of Seven industrial nations met in Washington, that some of
the key emerging powers like Brazil, Russia, India, China and
South Africa should be "on a glide path" to full G7 membership in
recognition of their rising economic might.

The five, known informally as the BRICS based upon their
initials, met the finance ministers from the United States,
Britain, Canada, France, Germany, Italy and Japan for lunch at
the Washington meetings but had no formal role.

India's US$700-billion economy has been growing at a rate of
more than 6 percent on average over the past five years.

But the government estimates that about 260 million people --
more than a quarter of the population -- lives in poverty,
without safe drinking water, proper sanitation facilities or two
square meals a day.

One of its pressing needs, which U.S. officials argue can be
countered through more private-sector investment, is for huge
spending on infrastructure to improve its roads, ports, airports
and electricity-generating capacity.

Last week, the Indian government approved setting up a state-
run firm to fund such projects, something short of the private-
enterprise solutions the Bush administration would favor.

Snow is to meet representatives of U.S. financial firms doing
business in India as well as Indian businessmen, and in New Delhi
he is expected to meet Finance Minister Palaniappan Chidambaram
and Prime Minister Manmohan Singh.

A measure of the growing importance the Bush administration
places on its strategic relationship with India came in July,
while Singh was visiting Washington, when President George W.
Bush made an agreement to permit U.S.-India nuclear cooperation.

That move, which has drawn criticism in the U.S. Congress and
elsewhere, followed 25 years during which the United States led a
fight to deny India access to nuclear technology because it had
developed nuclear weapons and tested them.

The United States is hoping that India will use its influence
within Asia and the G20 grouping of developing nations to try to
bring scheduled trade talks in Hong Kong between the 148 members
of the World Trade Organization to a successful conclusion.

Differences over farm subsidies -- a specially sensitive issue
for China since 60 percent of its people derive their incomes
from farming -- are already roiling negotiations.