USA welcomed India’s economic reforms: Nirmala Sitharaman

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The Biden administration as well as executives from the corporate sector in the USA have recognized this as a very positive step, says the Union Treasury Secretary

Treasury Secretary Nirmala Sitharaman said the Biden government and corporate sector leaders in the United States have welcomed the Indian government’s reforms, particularly the retroactive tax withdrawal, as a very positive move.

In August, Parliament passed a bill to abolish a tax regime that gave the tax office the power to go back 50 years and remove capital gains taxes wherever ownership had changed overseas but business assets were in India. The bill stipulates that the government will reimburse companies for the back tax provided that all legal challenges are withdrawn.

“The reforms we have implemented, particularly the steps to withdraw the retroactive tax, have been mentioned by the US government as a very positive step,” said Sitharaman.

“The companies we worked with also welcomed this decision,” she told reporters on Friday at the end of the Washington DC leg of her US trip.

From Washington, Ms. Sitharaman will travel to New York for an interactive session with the business community before flying home.

The Treasury Secretary started her week-long trip from Boston on Monday.

“Many of them (companies) thought it was brave and although it took some time. We also stated that these were legal constraints that we had to wait for because some of the ongoing litigation had to come to an end as a logical conclusion” said Mrs. Sitharaman.

“We waited and as soon as the logical conclusions were drawn we went to Parliament to withdraw this. All in all, it was received very positively, ”she said.

Trade deal soon

When asked about a trade deal with the US, Ms. Sitharaman replied that her focus was on an investment incentive agreement that was due by December.

“We talked about it. The two countries would like to continue the negotiations and conclude them at the earliest,” she said.

“But on the bigger issue of trade itself, the Department of Commerce (Ministry) is working with its (American) counterpart. So I haven’t really looked into it,” said Ms. Sitharaman.

Not a stranger to India-US relations as she played a key role in it and during her previous roles as Secretary of Commerce and Defense, it is Ms. Sitharaman’s first trip to the US after the COVID-19 pandemic hit both countries .

In addition to attending the annual meetings of the International Monetary Fund (IMF) and the World Bank here, her visit highlighted India’s economic recovery and her government’s commitment to long-term reform.

On the sidelines of the talks between the IMF and the World Bank, Ms. Sitharaman had more than 25 bilateral meetings, the most important of which was the economic and financial partnership between India and the US.

Treasury Secretary Sitharaman and Treasury Secretary Janet Yellen co-chaired this meeting.

The discussions touched on key areas of economic recovery from the pandemic to the macroeconomic outlook; Cooperation on global economic issues; Climate finance Support for infrastructure finance and the fight against terrorist financing.

Ms. Sitharaman had a number of meetings with business leaders in both Boston and Washington DC.

A dinner in their honor hosted by India’s Ambassador to the United States Taranjit Singh Sandhu at India House was attended by senior US officials, including President’s Special Envoy on Climate Change John Kerry, World Bank President David Malpass, USAID Administrator Samantha Power and Surgeon General Dr. Vivek Murthy.

These engagements provided an opportunity to highlight structural reforms the government initiated during the pandemic.


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