India and the United States need to work out a strategic agreement on the services sector, former Vice Chairman of Niti Aayog Arvind Panagariya said on Friday.
"As the partnership between two countries evolves, synergies will emerge," he said adding no negotiations on a free trade agreement are in the offing at present.
Bilateral trade in services has grown from a mere 6 billion dollars in 2000 to 51.8 billion dollars in 2017, marking a compound annual growth rate 13.5 per cent. Of this, India's exports of services to the United States were valued at 28.1 billion dollars and India's imports at 23.7 billion dollars.
However, India's effort to put minimal regulation like mandating data localisation and changes in foreign direct investment rules for e-commerce firms has met with stiff opposition from the United States.
There have not been much talks between the two countries on H-1B visa programme, which is popular among Indian technology professionals and allows foreign workers to obtain temporary authorisation to work and stay in the United States.
Panagariya said a free trade agreement on goods with the United States does not seem possible in near future as India will not open up its agriculture market for highly-competitive US suppliers.
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The total bilateral trade (goods and services) between India and the United States was 126 billion dollars in 2017, up 10.4 per cent from 114.2 billion dollars in the previous year.
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