US senator proposes free trade pact with India; Kamal Nath backs it

Mumbai: India and the United States, which represent two opposing groups in the World Trade Organisation''s multilateral trade negotiations, have proposed to examine a bilateral agreement to boost two-way commerce.

Commerce minister Kamal Nath welcomed the suggestion made by a US congressman that he planned to introduce legislation calling for the United States to begin talks
with India on a free trade agreement.

David Dreier, a Republican senator from California, said at the World Economic Forum India summit that such a move would be a building block towards the success of the Doha Round of global trade talks or the next World Trade Organisation (WTO) round.

"This is something which we should examine... the world wonders why the oldest and the largest democracies in the world cannot have an agreement in trade," Nath said.

India and the US are two key players in WTO''s Doha Round negotiations, an agreement on which has remained elusive so far.

Developed nations such as the US want developing countries to open up market for industrial goods, while emerging economies, including India, insist that rich countries, particularly the US, cut farm subsidies.

The WTO deadlock has prompted many countries to opt for bilateral or regional trade pacts.

India is negotiating several agreements, including one with the European Union.

Nath said a rule-based multilateral trading system was as important to India as it was to the US and EU. "We need it more than any other stronger player," he said.

Nath, however, said while the US has sensitivities in agriculture, India is more sensitive. He said over 650 million people in the country are dependent on agriculture and the country "cannot have a subsidised market access which destabilises our farmers."