U.S. Eximbank sees India as biggest market in 12-18 mths

MUMBAI (Reuters) - India is likely become the largest market for financing for the U.S. Export-Import Bank in the next 12 to 18 months, the bank's Chairman & President Fred Hochberg said, as the Obama administration taps opportunities in the world's second-fastest growing economy to create more U.S. jobs.

Eximbank is close to disbursing a $625 million loan to Reliance Power Ltd.'s mega power projects and is in talks about financing Air India's [AIN.UL] new purchase of Boeing 787s, Hochberg said in an interview to Reuters and Reuters Insider.

"I think we may see India's plans for power and infrastructure of $1 trillion in the next five years ... and a real appetite and desire to buy American products. That's what makes me confident that in the next 12 to 18 months, India could well be the largest country we finance," Hochberg said.

In the first nine months of its fiscal year through June, the bank approved $1.4 billion in transactions on behalf of American exporters and their Indian buyers. That financing has increased its overall exposure in India to $5.5 billion, just behind its exposure to Mexico, and has supported more than 10,000 American jobs, according to data provided by Eximbank.

Hochberg did not forecast any future disbursement figures.

Last year, Eximbank signed a $5 billion deal with Reliance, which is owned by billionaire Anil Ambani, for the purchase of U.S.-manufactured equipment for power projects.

Hochberg said that the bank was also in talks with state-run carrier Air India for the funding of 27 Boeing aircraft, of which seven are scheduled for delivery by March.

"The first delivery is in November, so we have to do it by then," he said.

Hochberg did not give an estimate of how much could be funded by the bank.

Top U.S. administration officials, including President Obama last November, have visited India to nudge policymakers to open up the country more to foreign investment.

Obama has an ambitious plan to double U.S. exports by 2015 and tapping emerging markets form a key part of that strategy.

Hochberg was part of a delegation accompanying U.S. Secretary of State Hillary Clinton to India this week.

Clinton met Indian Finance Minister Pranab Mukherjee, to press him on promises to open India's financial and insurance markets and give greater access to foreign retail companies, such as U.S. giant Wal-Mart, the world's biggest retailer.

However, the United Progressive Alliance government has been caught up dealing with corruption scandals, bringing policy action to a near standstill.

LEVEL PLAYING FIELD

Hochberg said that the United States wanted a level playing field among nations for financing exports.

"We would like transparency and let's have an agreed upon framework. What we really want is that the products of the United States and the products of other countries compete on the merits of the product and not because of some below-market financing," he said.

While the United States is increasingly looking at tapping big emerging markets like China, India and Brazil, it also has to compete with those countries, many of which are not bound by tight rules like the United States for funding export credit.

Hochberg recently ruffled feathers in China by saying the huge growth of Chinese telecoms equipment maker Huawei Technologies was partly because the company was backed by a $30 billion credit line from the China Development Bank.

Hochberg had suggested stretching the rules on export credit that apply to rich countries that make up the Organization for Economic Cooperation and Development to pressure China and other developing countries on negotiations on new rules.

"We are hopeful that as economies emerge Brazil, India, China -- particularly those three -- that they will join a more international framework so that we can compete on a level playing field with a greater transparency," he said.

(Additional reporting by Gautam Srinivasan; Editing by Susan Fenton)