WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Wednesday India could play a key role in reaching a deal in the Doha round of international trade talks if it were willing to open up non-agricultural sectors of its economy.
“I think Doha is within reach and I think India can play a leadership role in helping us get there,” Paulson told Reuters Television ahead of a four-day trip to India.
Paulson said access to the services sectors in India and other major emerging economies was important for a Doha deal to be reached.
“The positive thing, as I look at India, is in those industries where they haven’t been as regulated or they have been liberalized, they’ve competed very, very well — software, airlines and certain manufacturing areas,” he said.
Paulson also said a controversial deal that would provide India access to civilian nuclear technology would benefit both countries and had U.S. commitment, but he acknowledged domestic political pressure in India against it.
A failure of the deal, which would also bring India into the nuclear nonproliferation treaty, would not likely deter foreign investment in India, and the U.S.-India relationship would persevere, he said.
“India’s got a lot of good things going for it right now. There’s a lot of people that want to do business in India. Our relationship with India is broader than any particular transaction,” he said.
Paulson lauded India’s flexible currency exchange rate regime, adding that China and India are “two very different nations.”
“India has got balanced growth, they don’t have big imbalances, their economy relies on internal consumption (and) services. There’s a significant need in infrastructure, there’s room for more reform in the capital markets area,” Paulson said. “They’ve made real progress in terms of their capital markets and that’s been reflected in their economy and I think further changes and liberalization will also bear fruit.”
Paulson has been pressing China to allow its yuan to strengthen more quickly and to make its economy less dependent on exports.
But he said both India and China needed to increase the pace of their reform in order to counter rising protectionist sentiments around the world.