Terming India's move to increase foreign direct investment cap in insurance sector to 49 per cent from the current 26 per cent as step in the right direction, the US on Wednesday said it was looking at further deepening of bilateral economic ties in financial sectors like banking and credit markets.
"I think the proposal to move to higher levels of caps from 26 per cent to 49 per cent is a move in the right direction. We encourage the move," US Treasury Secretary John Snow told reporters after meeting Deputy Chairman of Planning Commission Montek Singh Ahluwalia in New Delhi.
John, who is on a two-day visit to India, said that he discussed issues related to further deepening ties with India on sectors like real estate, banking and credit market and financial services.
"We are here to discuss various issues in the financial sector and look forward to continuing the discussion. We had a good discussion," John said referring to his meeting with Ahluwalia.
Snow would meet Finance Minister P Chidambaram later in the day.
On the Indo-US economic dialogue the Snow said it was going on at an "excellent" pace.
Talking to reporters later, Ahluwalia said discussion with Snow was continuation of the issues Prime Minister Manmohan Singh had taken up during his recent visit to Washington.
"We had a good meeting. It was basically briefing the US side on the views held by different sections on issues like insurance cap and other financial issues and also exchanging views," Ahluwalia said.
On the issue of infrastructure development, Ahluwalia said the US was of the opinion that infrastructure sector was linked with development of financial and bond market.
"We discussed infrastructure development and its financing. The US view is that if we want to develop infrastructure we have to develop finance and bond markets. Growth of the insurance and pension funds would lead to growth in the bond market. We also have to maintain fiscal discipline," Montek said.
Ahluwalia said he apprised the US delegation about the reservations against raising the insurance cap of FDI to 49 per cent. "Government's will has not changed but there are reservations and the government is working towards a resolution," he said.