THE WHITE HOUSE
The U.S. and India: Concrete Steps to Improve Economic Relations
Today the United States and India have taken additional steps to strengthen our economic cooperation, promote jobs and opportunities in both countries, and increase the stability of the global financial system.
Agreement on Agricultural Tariffs
The United States and India reached an agreement that expands market access on more than $40 million of key U.S. agricultural exports to India. Under the agreement, U.S. exporters to India will now face lower tariffs, by up to one half, on items such as almonds, orange juice, citrus and other fresh fruits.
The tariff agreement was negotiated under the auspices of the WTO. Under its terms, in exchange for its tariff cuts in the agricultural items of interest to the United States, India will adjust its tariffs on other agricultural products.
The Financial Institutions Reform and Expansion (FIRE) Program
President Clinton also committed to help reform India's financial markets. At the request of the Government of India, the U.S. Agency for International Development has re-started the Financial Institutions Reform and Expansion (FIRE) program, a four-year, $25 million initiative to provide technical assistance to strengthen Indian financial markets and regulatory agencies. FIRE will also assist in creating the institutional base necessary for the emergence of a flourishing private insurance industry. The program will benefit the United States by helping to create an environment conducive to expanded U.S. trade and investment with India.
These measures will help bring greater resilience and stability to India's financial markets and institutions - important in a globalized world, where financial instability in country can create upheaval elsewhere.
The original FIRE project was terminated due to sanctions imposed by the U.S. in May 1998. Because of the importance of strong capital markets to global trade and investment, President Clinton has agreed to waive the Glenn Amendment and restart the project.
Progress in that first phase, which ran from 1994-1998, included training and technical assistance to Indian financial institutions such as the Securities and Exchange Board of India (SEBI) and the major stock exchanges. FIRE helped create awareness about "sound financial practices" in the U.S. and initiated direct link between Indian institutions and U.S. capital markets institutions, such as the SEC, the Depository Trust Company, and the Chicago Board Options Exchange.