US encouraged by reforms in India: Treasury Secretary Jack Lew

WASHINGTON: The US is encouraged by the economic reforms started by the new Indian government but it has a long way to go in addressing the concerns of American businesses, Treasury Secretary Jack Lew has said.

"I was in India recently and met with the Finance Ministry officials and with the Prime Minister and was encouraged at the direction that they're moving in, both in terms of opening up markets but also in terms of making clear for American businesses how tax issues will be resolved and other things, have been a real obstacle," Lew said.

"(But India has a) Long way to go," Lew said responding to a question from Congressman Ed Royce, Chairman of the powerful House Foreign Relations Committee during a Congressional hearing.

Royce was in India last week leading a bipartisan Congressional delegation.

"We had a good meeting with the Prime Minister Modi and the momentum there is headed in the right direction," Royce said.

"Last Thursday, the Indian parliament approved this new bill that raises the ownership caps for foreign insurers, for example, to 49 per cent, while also allowing foreign reinsurers to open branches in India. Now, that's long overdue. It's definitely good news," said the Congressman.

However, Royce who also travelled to China, said the US companies are not getting a level playing field in China.

"US firms continue to compete on an unlevelled playing field in China with very serious limits on ownership there; the regulatory pressures are significant. China recently introduced this bank technology, rules and draft counterterrorism law. I know they say it's on hold, but they say it's scheduled in due time," he said.

Lew said the US has made it very clear that this is a very problematic set of proposals that China put forward.

"I, together with the Secretary of State and the US Trade Representative, wrote to the Chinese leadership to make clear that we thought that they needed to stop that from taking effect," he said.