India and the United States are exploring ways to step up high-technology trade.
U.S. and Indian officials are expecting a huge expansion in what is called "knowledge-based trade" as the United States grants India wider access to dual-use technology. These are technologies that could also have military applications. Many such products were barred to India after it conducted nuclear weapons tests in 1998.
U.S. Under Secretary for Commerce Kenneth Juster told Indian businessmen recently that most export restrictions on such technologies have been eased. He says this will enable Indian and American businesses to collaborate in fields such as civilian space development, life sciences and nanotechnology.
India, which has a huge wealth of technical talent, feels it can become a major research hub in areas varying from pharmaceuticals to automobile engineering. But Mr. Juster wants India to ease restrictive trade rules that he says hamper commerce.
"The IT [information technology] sector came of age in India in the post-reform environment and has been able to operate largely free of government regulation and control," he said. "As businessmen from both countries have told us, bilateral trade and investment in high technology will take off if we can reduce whatever government impediments exist."
U.S. officials are also calling on India to be more flexible at the next round of multilateral trade talks. The last round of trade talks held in Cancun, Mexico, collapsed when developing countries refused to sign a deal to give agricultural goods from developed countries freer access to their markets.
Developing nations led by countries such as India insist this can only happen if richer nations agree to phase out farm subsidies, which are seen as harming farmers in poor regions.
Mr. Juster says the United States is disappointed by the stand India has taken.
"India cannot take the position that free trade and globalization makes sense when it means outsourcing jobs to India, or obtaining visas for working in the United States, but that they do not make sense when it means lowering barriers to trade or increasing access to your markets," he said.
Mr. Juster said U.S. exports to India grew by 25 percent to $4.3 billion this year since a recent round of tariff reductions by New Delhi.