India, US weigh $10 billion infrastructure fund

India and the United States could jointly set up a $10 billion infrastructure fund, trade minister Anand Sharma said on Monday.

The government is mulling several funds to finance the overhauling of its rickety infrastructure that some analysts see as holding back India from matching peer China’s double-digit growth rates.

“Finance minister Pranab Mukherjee and the US treasury secretary Timothy Geithner are directly discussing what modalities should be adopted to put in place the fund,” Sharma said. “In principle, it has been agreed.”

The infrastructure fund would involve private firms, he added.
The debt fund has been mooted by the India-US CEOs Forum comprising 12 corporate leaders from each side.

Meanwhile, India signed a preliminary shale-gas accord with the US as it prepares to auction blocks of the unconventional fuel next year. The agreement is aimed at determining shale-gas reserves in India, oil minister Murli Deora said.

The US will also help India prepare for its first shale-gas auction, scheduled to be held by the end of 2011, oil secretary S Sundareshan said.

India intends to join a boom in shale-gas exploration that has fuelled more than $39 billion of acquisitions in the US by companies including Exxon Mobil Corp, Royal Dutch Shell Plc and Reliance Industries Ltd. 

The nation faces an energy shortfall of 55% by 2030 as demand more than doubles to the equivalent of 1.3 billion metric tonnes of oil, according to the Paris-based International Energy Agency.