India's slowing economy affecting ties with US

The US on Tuesday said India's declining growth rate caused by a slowdown in reforms was the main threat facing bilateral economic ties. Yashwant Raj reports.

The US on Tuesday said India's declining growth rate caused by a slowdown in reforms was the main threat facing bilateral economic ties.

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And at the heart of it was a parliament "tied up in knots over debates about corruption" and such other things.

India and the US share a booming economic relationship with bilateral trade in merchandise goods worth $62.9 billion in 2012, marking 1023.2% growth over last 22 years. There is scope for more. But there are challenges, the US believes.

"The main threat is the declining growth rate that has occurred in India because of declining investment and because there has been a slowdown in economic reforms over the past several years," said Robert Blake, assistant secretary of state for South Asia, at a congressional hearing.

"It's no secret," he continued, "that Indian Parliament has been tied up in knots over debates about corruption and such other things." India posted a modest GDP growth of 5% in the current fiscal. But India believes the downturn is over, and better times are coming.