New Delhi, Dec 3: Commerce and Industry Minister Kamal Nath has said a Free Trade Agreement (FTA) between India and the United States needs to be closely looked at to foster a closer engagement with the world's most powerful democracy.
''This is something which we should examine. The world wonders why the oldest and the largest democracies in the world can not have an agreement in trade,'' Mr Nath said addressing a session last night at the India Economic Summit here.
Mr Nath's remarks came after US congressman Rep David Dreier, a California Republican, said he will lobby for a legislation for a FTA with India. Mr Dreier sought his comments on this.
The Commerce Minister welcomed the suggestion, saying that bilateral and regional agreements are the building blocks for any rule-based multilateral system.
The annual event, jointly organised by the World Economic Forum and CII, has seen the business community from India and overseas descend on the capital.
Analysts, however, say that Indian industry may not be too happy with the move for the fear of being swamped by powerful American companies. This may also lead to a surge in imports from the United States.
Both corporates and political personalities have been critical of the indiscriminate manner in which the FTAs are being negotiated.
India already has FTAs with Singapore, Sri Lanka and Thailand.
It is negotiating such agreements with the European Union and the ASEAN. There is also talk of reaching such preferential agreements with Japan and China.
Mr Nath reiterated India's stance that the developed countries should cut their agricultural subsidies before insisting that India open up its agriculture to provide market access.
''The Doha round is a development round. It is not about perpetuating the distortions in agriculture trade,'' he said.
Mr Nath added that a rule-based multilateral trading system was as important to India as it was to the US and the EU.
''We need it more than any other stronger player,'' he said.
The Minister referred to the paradox of India being a country with high growth and appalling poverty. ''In my constituency in Chhindwara in Madhya Pradesh people will not understand the meaning of nine per cent growth. They have not experienced the benefits of this growth.'' Interestingly, Mr Nath's comments on poverty and growth came when global and Indian CEOs were savouring a sumptuous dinner at the five star hotel Taj Palace.