India assures US of economic vigor

US: India insisted Tuesday that its economy would regain vigor and satisfy foreign investors as it fended off US accusations of a worsening business climate ahead of high-level talks.

Secretary of State Hillary Clinton on Wednesday holds an annual dialogue on the shape of the growing relationship, fresh after clearing a main impediment by exempting India from US sanctions over its purchases of Iranian oil.

The world's two largest democracies have been stepping up cooperation on issues as diverse as Afghanistan and higher education, but US businesses have been disappointed by the pace of economic liberalization in India.

Michael Froman, President Barack Obama's adviser on international economic issues, said that the mood of US businesses should be “worrisome” as companies had led the push to improve a relationship that was frosty during the Cold War. “US firms have increasingly grown concerned about the economic relationship, fearing that the investment atmosphere has deteriorated or that domestic political challenges are slowing the pace of reform,” Froman said at the US-India Business Council.

Foreign Minister S.M. Krishna, who will lead India during the talks on Wednesday, responded that the emerging economy was firmly committed to growth. “In an era of global interdependence, not everything is within the powers of national governments, but I am confident that we will restore investor confidence and regain economic momentum and growth,” he told the business group.

In data released Tuesday, India's industrial output in April grew just 0.1 percent from a year earlier, fueling concerns that Asian nations whose growth once seemed inevitable can no longer offer the boost the global economy needs to overcome a sluggish Europe.

“Over the past two decades of extraordinary change in the Indian economy, there have been periods when the growth seemed to lose its steam and the agenda of reform seemed to be slowing,” Krishna said.

“But time and again, our economy rebounded with new vigor on the strength of strong fundamentals and supported by some policies and prudent economic management,” he said. AFP