The world’s third-largest economy, which has reached similar deals with South Korea and Association of Southeast Asian Nations and is negotiating with Japan and the European Union, has “already signed an MoU for cooperation in trade in services and investment during my last visit to Washington,” said Indian Commerce Minister Anand Sharma

“We should now seriously consider engaging in negotiations for a comprehensive economic partnership agreement that encompasses trade, investment and services. This will bring a paradigm shift in global architecture,” said Sharma while addressing a business event along with US Commerce Secretary Gary Locke.

Locke did not seem very enthusiastic about the proposal. “We have a variety of different economic agreements that we are working on. Everything will have to be done in stages. Right now, we have many agreements concluded that the business communities are focusing on. So, we take one step at a time,” he said

He also referred to India’s FDI rules as “complex, non-transparent and barriers to trade,” and added that these are likely to hit long-term trade relations between the two nations.

“While India had embarked on a high growth path, it should seriously consider liberating certain sectors for more foreign investment, or the country’s growth might be stalled,” Locke said, referring to the opening up of the retail sector, particularly multi-brand retail, for FDI.

However, Sharma rebutted the remarks and said India was against protectionism of any kind. “We are simplifying and rationalizing our FDI policy and cutting down transaction costs. We have created ‘Invest India’ company to guide FDI into the country with the Federation of Indian Chambers of Commerce and Industry (FICCI), central and state governments as the stakeholders,” he said.

Highlighting Obama’s “National Export Initiative” that aims to double US exports in the next five years and creating 50,000 jobs, Locke said: “As trading partners, US companies can help India meet the ambitious economic and social goals laid out by its government, while the Indian market holds enormous potential for US exporters.”

He also said that India needs to bring down its import tariffs and remove non- tariff barriers to allow more US goods to come into the country.

On his part, Sharma said India and the US already have an institutional mechanism to boost bilateral commerce through the trade forum.

“We should use that as a foundation to build upon further,” he said. “But these decisions require elaborate negotiations and the steps would be calibrated.”

Bilateral trade between the two countries, according to estimates, is likely to cross $50 billion this year, against $36.5 billion in 2009-10 and $26.8 billion in 2005-06.

During his recent visit to India, Obama had already made a case for increased commercial engagement with the third-largest economy and asked it to remove trade and investment barriers in a host of areas including, telecom, insurance and retail.