Mumbai: India and the United States are contemplating a bilateral trade and investment pact that could be more than a free-trade pact, commerce and industry minister Kamal Nath said.

"Bilateral trade agreements are currently in the pipeline with at least 10 potential partners ranging from Asean, the EU, US and Canada," the minister said at the Pravasi Bharatiya Divas.

He said India and the United States are planning 'mutually beneficial' bilateral investment agreement even as two-way investment flows have increased considerably.

Kamal Nath is expected to discuss the issue with US trade representative Susan Schwab when they meet in Chicago next month.

It is not clear if US is pushing for a bilateral deal. India, however, is opposed to an arrangement where Washington is expected to insist on a treaty on investment.

US has all the way been demanding not just greater liberalisation but pre-investment national treatment of its investments into India. India is willing to accord the same status to foreign as well as local entities once global players have invested in the country.

A trade agreement would also open the doors for the US to seek more presence in sectors like banking and insurance, areas where Washington has adopted a tough posture making it difficult for Indian banks to operate freely in the US.

India has so far managed to sign bilateral trade deals with Sri Lanka, Singapore and a limited agreement with Thailand.

Progress in trade pacts with Japan and South Korea have been slow, while the demands from Gulf countries have forced India to put the proposed pact on the backburner.

Meanwhile, Indian industry, fearing cheap imports from China, has asked the government to move slowly on a trade deal with that country.

The final outcome, however, would depend on how Prime Minister Manmohan Singh deals with pressure from Beijing during his visit starting Saturday.

India is still in early stages of negotiations with EU on a comprehensive trade and investment deal.

Reports also quoted US trade sources as saying that the two countries have proposed negotiations aimed at freer trade and investment flows.

"In the private sector, we are hopeful of moving forward to pursue and conclude a mutually beneficial agreement between India and the United States. India has negotiated many investment agreements with countries around the world, in Europe and Canada," said Susan Esserman, former deputy US trade representative.

"Given the increased stature of our relationship, the incredible increased investment on both sides it would be the appropriate logical next step. And we in the private sector are very enthusiastic about this possibility," Ms Esserman told the US Chamber of Commerce.
 
"We think there is a great deal of opportunity to benefit both sides reaching a mutually agreeable investment agreement," she added.

"We are at the very beginning of the discussions...we see great opportunities for enhanced investment in India," she said making the point that an investment agreement will be 'beneficial' to facilitate investment in many areas like infrastructure.

India has set a global target of $550 billion, Nath said, compared to $450 billion at present which includes trade and investment flows. However, much will depend on domestic lobbies and policy pressures which have already restricted the government's ability to negotiate free trade agreements.