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U.S. Department of Treasury Under Secretary for International Affairs Timothy Adams says, "India is playing a growing role in global trade and investment, and the U.S.-India economic relationship has become deeper." Annual U.S. exports to India have more than doubled since 2000, says Mr. Adams, and imports from India to the U.S. are up seventy-five percent. The value of U.S. direct investment in India has more than tripled over the last five years from two-billion-four-hundred million dollars in 2000 to eight and a half-billion dollars in 2005.
India's people are benefiting from the expansion of trade. India's annual gross domestic product growth rate now exceeds nine percent. The country's poverty rate has been reduced from almost forty percent to under thirty percent in the past ten years. Adult literacy rates and primary school completion rates have increased. And technology is becoming more widely available, including a fourteen-fold increase in cell phone usage in the last four years.
Mr. Adams says, "India's strong growth could not have occurred without government policies to open the country to competition." India's economic liberalization began in the early 1990s, when Manmohan Singh, now India's prime minister, was finance minister. India reduced trade tariffs, eased non-tariff barriers, eliminated licensing restrictions on raw materials, and intermediate and capital goods. The result: India's total trade has grown from less than fifteen percent to nearly forty percent of gross domestic product.
Under Secretary of the Treasury Adams says "India has also taken steps to relax controls on foreign investment and borrowing." These and other reforms, says Mr. Adams, have brought India success in the global economy. But globalization also presents new challenges. To complete the modernization of its economy India needs to further reduce barriers to trade and investment, liberalize its financial sector and improve its business climate.
Under Secretary of Treasury Timothy Adams says "India needs to overcome the protectionist pressures that affect every economy and improve its investment climate." If it succeeds, he says, "the future will be bright."