Rajeev Bhatt

AFTER THE PACT: Finance Minister P. Chidambaram and U.S. Treasury Secretary John Snow at a joint press conference after the signing of the Cooperation Framework Agreement between the U.S. Trade and Development Agency and the Ministry of Finance, in New Delhi on Wednesday. U.S. Ambassador to India David C. Mulford is at extreme right.

NEW DELHI: India on Wednesday gave an assurance to the United States that it would make all-out efforts to curb money laundering and stamp out financing of terrorist activities while it laid down a roadmap for major reforms in the financial sector.

At a joint press conference with the U.S. Treasury Secretary, John Snow, at the conclusion of the Indo-U.S. Financial and Economic Forum meeting here, Finance Minister P. Chidambaram said: "I have told Secretary [John Snow] that we are fully committed to checking money laundering as well as stamping out financing of terrorist activities.

"An anti-money laundering legislation is in place. There has to be an inspection and a report, which will happen shortly," he said while reiterating the intention of the two countries to implement the recommendation of Financial Action Task Force. The panel was set up to prevent abuse of the financial system and both the U.S. and India agreed to work together to identify and freeze the assets of terrorist groups.

Mr. Snow noted that during the Forum meeting, the need to strengthen India's financial sector was discussed in greater detail and that Mr. Chidambaram had presented a "good view of the roadmap" for reforms in the financial sectors such as banking, pension and insurance.

Cooperation between the two countries in the capital market, Mr. Snow said, also figured in the discussions, especially the roles of the National Stock Exchange and the recently set-up Commodity Exchange, which would have far-reaching effects on the Indian economy. The other issues taken up at the meeting were India's efforts to strengthen the financial system, lowering the costs of intermediation and increase in fund access to agriculture, small businesses and the poor.

A joint statement issued at the end of the Forum meeting said: "Both sides noted the importance of having strong insurance and pension sectors in order to increase long-term savings and availability of long-term financing."

During the discussions, Indian officials stressed their key priorities for financial sector reforms. These included expansion of financial services to the poor and augmenting private sector capabilities, the statement said.

While the two delegations agreed to arrange further consultations to share experience and expertise on these issues, they also agreed to continue technical cooperation in the field of currency security, including detection and enforcement.

Prevention of counterfeiting of national currencies was part of the fight against financial crimes and important to maintaining the integrity of the financial system, the statement said.

The two sides emphasised that a successful conclusion of the WTO Doha Development Round negotiations was essential to promote global trade and growth.

It was agreed that a satisfactory outcome on agriculture negotiations, as also services, would be crucial in this regard. They urged for progress at the upcoming Hong Kong Ministerial.

Also discussed were a variety of issues that affected global growth.

It was noted that global economic performance remained sound despite the impact of spiralling oil prices. In India, the growth outlook appeared favourable while in the U.S., economic conditions remained solid despite the after-effects of the recent hurricanes.

Both sides also noted that several potential risks existed, including the impact of energy prices, the tightening of financial market conditions and uneven growth in many parts of the world, the statement added. There was a need to maintain global growth while reducing global current account imbalances.

The Indian side affirmed its intention to pursue policies to maintain strong overall growth, the statement said.

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