Barack Obama also praised PM Narendra Modi's vision of entrepreneurship and innovation.
US President Barack Obama on Thursday expressed confidence that the Goods and Services Tax (GST), passed by the Indian parliament last month, will unleash significant economic activity.
He said this during a meeting with Prime Minister Narendra Modi on the sidelines of the 11th East Asia Summit in Vientiane.
This could well be the last bilateral meeting between PM Modi and Barack Obama before the latter demits office in January next year.
The two last met in June when PM Modi visited Washington.
According to sources, during Thursday's meeting, both leaders reviewed the immediate priorities in the strategic partnership between the two countries.
"President Obama praised Prime Minister Modi's initiatives to reform the Indian economy," the sources said.
"In particular, he said that the passage of GST will unleash significant economic activity."
Barack Obama also praised PM Modi's vision of entrepreneurship and innovation, saying it would be "very important for a country like India", it is learnt.
On his part, the Prime Minister praised the President for his contribution to the India-US relationship and the growing trust between the two sides.
The Second India-US Strategic and Commercial Dialogue was held in New Delhi last month.
Obama, according to the sources said, said that he has always been a friend of India and would continue to be a "strong partner of India and help in any way I can".
"Discussions then focused around climate change issues and energy cooperation," the sources said.
"The two leaders reviewed progress on Indo US collaboration in nuclear energy, solar energy and innovation."
Both PM Modi and Barack Obama had played crucial roles in the signing of the agreement at the Conference of Parties (CoP)-21 Paris climate summit.
According to the sources, when PM Modi invited President Obama to visit India after he demits office, the latter said that he would welcome any opportunity to visit India.
"As an aside, he added that he and (wife) Michelle were yet to see the Taj Mahal," the sources said.
On Thursday, PM Modi attended the 14th India-Asean Summit and the 11th East Summit.
He also held bilateral meetings with South Korean President Park Geun-hye, State Counsellor and Foreign Minister of Myanmar Aung San Suu Kyi and Laos Prime Minister Thongloun Sisoulith.