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India's economic rise presents huge opportunity for Pak: US

business Updated: Jul 17, 2011 02:50 IST

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India's rise offers a huge opportunity for Pakistan which is facing major economic challenges, a top US official has said, advocating that Islamabad should consider improving its trade ties with its neighbour.

"India's economic rise presents a huge opportunity for Pakistan, a bilateral breakthrough could provide a catalyst for wider regional economic integration in South and Central Asia," Robert Hormats, under secretary for economic, energy and agricultural affairs, said.

Hormats said the pace of economic integration in the Asia Pacific region as a whole over the last two decades has been unprecedented and should serve as an example for other regions.

"It should, and I believe it can, be replicated in South Asia as well. Hundreds of millions of people would benefit from such increased collaboration," he said.

Hormats, who is part of the high-power US delegation for next week's India-US strategic dialogue in New Delhi, said the two countries already work together in a wide range of areas resulting in enhanced trade and investment and mutual job creation.

Trade between the US and India has doubled twice in the past ten years. It continues to grow and drive their economic partnership.

In 2010, the two-way trade was up almost 30% from the year before.

"In Delhi and Chennai (the two cities to be visited by the US delegation) we will consider ways to further expand these numbers," Hormats said.

Indian foreign direct investment in the United States was $5.5 billion at the end of 2009, growing at approximately 35% between 2005 and 2009, making India the seventh largest growing source of FDI in the United States.

"We welcome such investment, we welcome more and more of it, and we will also discuss this while we are in India," Hormats said.

However, he said, it is unfortunate that some economic barriers continue to make it hard for US exports to gain access to certain portions of India's markets, especially in agricultural goods.

"Restrictions in retail, insurance, defence and other key areas continue to limit the expansion of American firms and US and Indian firm partnerships in India. We would like to see more of those partnerships. We will also discuss these topics during our trip," he said.

"We must encourage and recognise the benefits of market openings that will allow trade and investment between our two countries to grow and to thrive to the mutual benefit of both," Hormats said.