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U.S. Department of State 
96/12/18 Statement: The Indo-U.S. Economic/Commercial Subcommission 
Office of the Spokesman 
Press Statement Released by the Office of the Spokesman 
December 18, 1996 
         The Indo-U.S. Economic/Commercial Subcommission Meeting 
The Indo-U.S. Economic/Commercial Subcommission completed a highly 
successful meeting yesterday, the second since its revival in 1994.  The 
Indian delegation was led by Finance Secretary, Mr. Montek Ahluwalia, 
and included officials from the Ministries of Finance, Commerce and 
External Affairs.  The American side was led by Under Secretary for  
Economic, Business and Agricultural Affairs, Mrs. Joan Spero, and 
included senior officials from the Departments of State, Commerce,  
Treasury, Energy, the Office of Management and the Budget, the Office of 
the U.S. Trade Representative and the U.S. Agency for International 
Development.  In addition, influential representatives of the U.S. and 
Indian private sectors were present and participated in the 
The Subcommission seeks to strengthen and deepen the economic 
relationship between India and the United States through comprehensive, 
results-oriented dialogue on economic policy.   The economic reforms 
begun in India in 1991 have led to a fundamental reassessment of India's 
economic potential by the international business community.  They have 
already led to increasing levels of investment and trade with the United 
States and the potential is much higher.  The United States,  now 
India's largest trading partner, considers India to be one of the ten 
big emerging markets for the 21st century and believes that continued 
economic reform is the key to sustained growth and greater U.S. 
involvement in the Indian economy.  Both India and the United States 
view the Subcommission as a valuable forum to address and advance these 
economic goals. 
Two working group presentations were a highlight of the just-concluded 
Subcommission meeting.  During the past eighteen months, the working 
groups have been tasked with developing proposals and recommendations to 
meet India's infrastructure needs, particularly the development of 
power, transportation and telecommunications.  The Private Sector 
Working Group made recommendations on specific problems that hinder 
business development.  The Finance and Investment Working Group 
concentrated on broadening and deepening Indian financial markets and 
regulatory mechanisms for infrastructure sectors.  A third Working Group 
on Trade and Commerce is expected to convene soon. 
As mandated by the Subcommission, the Working Group on Finance and 
Investment focused its attention on macroeconomic financial and 
regulatory issues as related to, and affecting, financial market 
development and investment in India.  The Working Group centered its 
discussion on infrastructure financing and directed its plan of action 
toward steps that will promote infrastructure financing.  In reviewing 
the considerable progress made in policy and regulatory reforms in the 
area of infrastructure, the Working Group agreed to: 
(i)  Create fora for the exchange of experiences, best practices, in 
regulation of the provision of infrastructure services including 
government-to-government, private sector-to-private sector and private 
(ii)  Encourage agency-to-agency technical cooperation and assistance, 
in so far as the U.S. experience and practices are relevant:  Bilateral 
work between the U.S. Department of Energy and Indian Power Ministry was 
recognized as useful.  U.S. Department of Transportation was encouraged 
to explore avenues for such cooperation/assistance with its Indian 
(iii)  Explore ways to intensify cooperation between Indian and U.S. 
private sectors on capital market development.  A private sector forum, 
with foreign and domestic participation, could promote capital market 
development through position papers.  Conferences and meetings would be 
encouraged by such a forum, at which position papers would be discussed 
with senior-level government officials. 
The second meeting of the Subcommission provided the opportunity for a 
comprehensive dialogue on the economic reform program of the new Indian 
government.  In its presentation, the Indian delegation outlined the 
major features of the Common Minimum Program including especially the 
commitment to encourage larger inflows of foreign investment, continuing 
the process of fiscal consolidation and tax reforms and reforms in the 
financial sector.  The Indian delegation emphasized the special 
importance of infrastructure and outlined the policies of the Government 
to attract private sector investment into key infrastructure sectors, 
including especially power,  telecommunications, ports and roads.  The 
U.S. delegation reviewed the strong linkages existing between the U.S. 
and Indian economies and discussed its own experience with economic 
reform, focusing specifically on banking and fiscal policy.  The 
Subcommission's work has helped to define the areas of Indo-U.S. 
cooperation within the framework of the priorities outlined by the 
Indian delegation.  The Subcommission also reviewed the progress 
achieved under the U.S.-India Commercial Alliance and the U.S.-India 
bilateral energy consultations. 
The Indo-U.S. Economic/Commercial Subcommission is a sub group of the 
Indo-U.S. Joint Commission on Economic, Commercial, Scientific, 
Technological, Educational and Cultural Cooperation, created in 1974 
during the visit of Secretary of State Henry Kissinger to New Delhi.  
The Subcommission is the government-to-government equivalent of the 
U.S.-India Joint Business Council and cooperates closely with other 
U.S.-India bilateral institutions such as the U.S.-India Commercial 
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