Geithner to raise US biz concerns over India with Pranab

On Thursday, Finance Minister Pranab Mukherjee will meet his American counterpart Timothy Geithner who is expected to raise concerns of the US corporate sector over doing business in India.

The meeting, on the sidelines of the Annual Spring session of the International Monetary Fund and World Bank, will happen within a couple days of about a dozen US industry associations writing to the US Treasury Secretary to take up the controversial move by India to amend the Income Tax Act with retrospective effect.

They have raised concerns over the impact of Mukherjee's Budget proposal to amend the IT Act with retrospective effect to bring into tax net Vodafone-type merger and acquisition deals involving assets in India.

UK-based Vodafone, which in 2007 bought Hong Kong-based Hutchison's telecom business that included India assets for around $11 billion, has attracted tax of Rs 11,000 crore (Rs 110 billion).

Mukherjee, on his part, is expected to raise several bilateral issues.

On his arrival from New York late in the afternoon on Wednesday, Mukherjee held a series of meetings with his officials and Indian diplomats in Washington in preparation of the meeting.

Mukherjee is scheduled to kick-off official engagements with a bilateral with the South Korea Foreign Minister, following which he would drive down to the Treasury Department to meet Geithner.

He is also scheduled to attend the Finance Ministers meetings of BRICS (Brazil, Russia, India, China and South Africa) countries.

Besides, Mukherjee will chair a meeting of the G-24 countries.

Later, he will speak on 'Global Economy and Framework' in the first session of G-20 Finance Ministers and Central Bank Governors' meeting. India and Canada are currently co-chairing the working group on global framework.

Image: Timothy Geithner | Photograph: Reuters