India open to free trade agreement with US

Prime Minister Manmohan Singh on Tuesday said India is open to discussions on a free trade pact with the US on the lines of the agreement New Delhi already has with the 10-nation South East Asian bloc.

"I don't mind exploring the possibility for a free trade agreement with the US," Singh, who is on a four-day state- visit to the US, said during an interaction with the Council on Foreign Relations, a think tank.

The Prime Minister, however, said India's first preference was a fair and equitable multilateral trading agreement, and expressed hope that the Doha Round can succeed.

Calling for "reduced role for trade distortions represented by tariffs and non-tariff barriers," the Prime Minister stated, "I sincerely hope that the Doha Round can succeed."

The Doha Round of talks on a global trade deal have been stalled for last eight years now on differences over farm subsidies, lowering of tariff on industrial goods and protection to farmers in developing countries.

India in August signed a free trade agreement in goods with ASEAN aimed at eliminating duties on 4,000 items by 2016. Singh also said a trade agreement like the one with the European Union, was not conducive for south Asia due to tight regional arrangements.

"For various historical reasons we are not able to have a regional tariff union of the type that exists in some other parts of the world," the Prime Minister said.

"So our first preference would be that the multilateral trading system should evolve in a direction where there is a reduced amount of tariff distortion, which distort the flow of trades, goods and services," he added.