Geithner, Bernanke going to India, Japan

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NEW DELHI, Oct. 8 (UPI) -- U.S. Treasury Secretary Timothy Geithner's India visit this week is well-timed, with the country planning reforms favoring foreign investments, observers say.

Geithner and U.S. Federal Reserve Chairman Ben Bernanke will be in India for two days, starting Tuesday, before going to Tokyo for the annual meetings of the International Monetary Fund and World Bank, Indian media reports said.

While in India, Geithner and Bernanke will participate in the third annual meeting of the U.S.-India Economic and Financial Partnership, along with Indian Finance Minister Palaniappan Chidambaram, and have discussions with the Confederation of Indian Industry and the U.S-India Business Council. They will also meet Bernanke's Indian counterpart, Duvvuri Subbarao, governor of the country's central bank.

The U.S. officials will also visit Mumbai to meet with Indian business leaders.

"The U.S.-India Economic and Financial Partnership has served as a platform for greater cooperation on economic issues of importance to both nations," The U.S. Treasury Department said on its website announcing Geithner's visit.

"Both countries recognize the importance of expanding bilateral economic engagement, noting the rapid growth of U.S.-India economic ties and the increasing range of global macroeconomic and financial issues, including those related to illicit finance, on which the United States and India cooperate."

The Indian government led by Prime Minister Manmohan Singh faces serious economic problems, including high inflation and burgeoning deficits. It recently announced a number of groundbreaking economic reforms. Chief among them is allowing foreign direct investments in India's $450 billion multi-brand retail sector, paving the way for U.S. retail giants like Wal-Mart to gain a bigger foothold in Asia's third largest economy.

The Indian government also has approved increasing the equity cap on investing in the Indian insurance industry to 49 percent from the current 26 percent.

The Hindustan Times said economists and experts would be watching carefully how Geithner and Bernanke respond to India's latest reform moves, which also include raising diesel prices to reduce the budget deficits.