India and the US Friday asserted the importance of maintaining supportive policies until a strong and inclusive economic recovery is firmly entrenched. Finance minister Nirmala Sitharaman and US treasury secretary Janet Yellen discussed the macroeconomic outlook and recovery from the Covid-19 pandemic, financial regulatory and technical collaboration, multilateral engagement, climate finance and anti-money laundering, and combating the financing of terrorism.

The discussions took place during the ministerial meeting of the India-US Economic & Financial Partnership in Washington DC on Friday in which both countries agreed on engaging further on cross-border payments and development of the international financial services centre (IFSC). They also agreed on fighting financial crimes and on the effective implementation of the Financial Action Task Force standards to protect the financial systems from abuse.

Welcome OECD Tax Framework

In a joint statement issued post the meeting, India and the US reaffirmed the collective developed country goal to mobilise $100 billion annually for developing countries from public and private sources.

On climate finance, both countries shared views on the re-energized global efforts to increase climate ambition as well as respective domestic efforts to meet publicly expressed climate goals.

“We intend to engage further on addressing climate change between our two ministries, as well as through the Finance Mobilization pillar of the recently-launched Climate Action and Finance Mobilization Dialogue (CAFMD) under the US-India Climate and Clean Energy Agenda 2030 Partnership,” the statement said.

Both affirmed their commitment to debt sustainability and transparency in bilateral lending, while acknowledging the importance of working through multilateral development banks to help India access and mobilise available financing to support development objectives, including for climate.

India and the US also welcomed the OECD/G20 Inclusive Framework political agreement reached last week on updating the international tax architecture to make it more stable and fairer.

“We should work together and with other partners at the technical level in order to expeditiously implement Pillars 1 and 2 by 2023,” the statement added.

Both countries will continue collaboration for increased cooperation in sharing of information for tackling offshore tax evasion, while continuing to engage in discussions on full reciprocal arrangement on the Foreign Account Tax Compliance Act.

On financial regulatory issues, both countries highlighted important structural reforms taken to strengthen their respective domestic financial systems. “The United States and India look forward to discussions on emerging financial sector topics, such as cross-border payments and payment systems and the development of the International Financial Services Centre at GIFT City,” the statement added.

The countries will continue to collaborate on attracting more private sector capital to finance India’s infrastructure needs.