Geithner eyes US investment on India visit.

Timothy Geithner will begin his maiden visit to India as US treasury secretary on Tuesday, hoping to improve an economic relationship that is often eclipsed by Washington’s trade with China.
Geithner will begin his two-day trip in Delhi — a city where he lived while his father was working for the Ford Foundation — holding meetings with Indian Prime Minister Manmohan Singh and Finance Minister Pranob Mukherjee.
The 48-year-old, who is an Asia expert and speaks fluent Mandarin, hopes to focus talks on global economic management, financial investment and building infrastructure, a senior treasury official said ahead of the visit.
“India is an emerging global power and one with which the United States has an increasingly vital economic and financial relationship,” the treasury official said.
After years of ing Cold War tensions, unease about Washington’s close ties with Pakistan and Washington’s displeasure at India’s acquisition of a nuclear , relations are blooming.
In mid-March the two countries signed a framework for cooperation on trade and investment in Washington, which US Trade Representative Ron Kirk said would tap the “almost limitless potential for growth in trade between our two countries.”
But ties between the world’s first and fourth largest economies — and two of the world’s largest democracies — are still overshadowed by the vast trade between China and the United States.
“This trip is significant just for the fact that it is happening,” according to Arvind Subramanian of the Peterson Institute for International Economics.
“First and foremost, this trip is about symbolism, aimed at establishing a parallelism with the US-China relationship,” he wrote in a recent commentary.
Trade between India and the United States has roughly doubled in the last five years, as India has become one of the world’s foremost emerging markets.
But that relationship, for years focused on trade and outsourcing, is increasingly focused on investment.
Bilateral foreign direct investment was worth around 21 billion dollars in 2008, according to the treasury, still a pittance compared with flows between the United States and Europe, or China.
To boost ties, Geithner is set to press India to open its highly regulated markets to US investment, in part by launching a US-India financial partnership.
The project would spur regular cabinet-level US-India meetings, in line with a similar program between the United States and China.
Washington argues that more open Indian markets would afford India easier and cheaper access to capital that could help finance the country’s massive infrastructure needs.
It is a case Geithner is also likely to make when he visits Mumbai, India’s business and financial capital, where he will meet leaders of US firms present in India, as well as top Indian CEOs.
Throughout the trip Geithner will be accompanied by Donald Kohn, vice chairman of the Board of Governors of the Federal Reserve.