US, India Agree on $10 Billion Infrastructure Fund

India and the United States plan to create a $10 billion infrastructure debt fund as a public-private partnership to expedite investments in India's infrastructure, according to India's commerce minister Anand Sharma.

"Both governments have, in principle, agreed to set up an infrastructure debt fund based on the recommendation of the India-U.S. Business Forum," Sharma said at a trade conference in New Delhi Monday.

The minister said New Delhi plans to spend an estimated $1 trillion on infrastructure development under the 12th Five Year Plan (2012 to 2017), and about 30 percent of this is expected to come from the private sector.

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"Indian Finance Minister Pranab Mukherjee and U.S. Treasury Secretary Timothy Geithner are directly discussing what modalities should be adopted to put in place the infrastructure debt fund," Sharma said.

Without indicating a timeline, he said details of the proposed fund will be announced after the two sides take a final call on it.

Earlier, U.S. under secretary for international trade Francisco Sanchez said the Obama administration would encourage American investment in the Indian infrastructure sector.

Sharma also said both countries had agreed to boost trade and investment in various sectors such as infrastructure, technology, pharmaceuticals and education.

Meanwhile, U.S. President Barack Obama, who is currently on a three-day visit to New Delhi, held talks with Indian Prime Minister Manmohan Singh and the two leaders called for closer ties between the two nations.

"For in Asia and around the world, India is not simply emerging; India has already emerged. And it is my firm belief that the relationship between the United States and India -- bound by our shared interests and values -- will be one of the defining partnerships of the 21st century," President Obama said, addressing members of the Indian Parliament Monday.