India and the US must work towards a comprehensive trade agreement to increase trade levels between the two countries, said Ajay Dua, Secretary, Department of Industry Policy and Promotion, Ministry of Commerce and Industry, at a Seminar on “US-India Trade and Investment: Issues and Opportunities,” organized by the Confederation of Indian Industry (CII).
Mr Dua said both the countries must dismantle trade barriers to strengthen bilateral trade relationship. Considering India's demographic profile with a strong middle-class, there is immense opportunity for further growth in trade relationship between the two countries.
Listing some of the trade barriers in the US market, he said India continues to face delays in visa and work permits, prohibition and quotas on foreign providers, non-recognition of India's professional qualifications and labour certification requirements.
Mr Dua said the American companies in India are facing problems of inflationary pressure, gray economy, investment caps on foreign ownership, poor infrastructure, restrictive labour laws and poor educational reforms in India.
Highlighting the growth of trade between the two countries, Mr Dua said India's exports to the US have more than doubled from US$8.5 billion in 2001 to $17.3 billion in 2006. India's imports from the US have been increasing at a higher pace than exports over the same period, he said.
As the US is the key market for services exports from India, the Indian services export to the US has the scope to touch $65 billion by 2010, he said. In the services segment, professional services and computer systems are steering India's services exports, he pointed out. In this context, he said, India needs to address the issue of talent squeeze also.
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