India and the United States can look into the possibility of a Free Trade Agreement in the long term to boost bilateral economic relationship, a top US trade official said on Friday.
"I think from a long term point of view, an FTA can be looked into. Meanwhile, from a medium-term perspective, the 2 countries should take steps, which act as building blocks for enhancing our relationship," Deputy US Trade Representative Karan Bhatia said on the sidelines of the India-US CEOs forum in New Delhi.
Complete Coverage: President Bush in India
The US wanted a more vigorous relationship with India, Bhatia said, adding that the Trade Policy Forum, which was set up last year, was working towards strengthening bilateral ties.
In the medium term, the two countries should work on steps such as liberalising industrial tariffs and encouraging exports of farm products, such as that of mangoes to US, he said, adding however that right now it was too premature to think about an FTA. Bhatia clarified that the US government was not talking with India on the issue.
US companies were interested in the services and opening up the sector will benefit both the countries, he said, adding that India can become a global centre for financial services but it required insurance and banking reforms.
The two countries were also working together for success of the World Trade Organisation trade negotiations, he said. Businessmen from both sides have in the past suggested signing an FTA particularly to boost trade in services.
The total merchandise trade between the two countries is about $25 billion at present and is likely to touch 40 billion dollars in the next two-three years.