India and US are looking toward building on the economic partnership betwen the two countries in the backdrop of US president Barack Obama's recent visit.

 Commerce and industry minister Anand Sharma said on Tuesday that New Delhi is working on a Comprehensive Economic Partnership Agreement (CEPA) with the US.

“After the successful visit of US President, we should now seriously consider between the two countries to engage in negotiations for a comprehensive economic partnership agreement which encompasses trade, investment and services,” Sharma said at a FICCI function in New Delhi.

India already has a CEPA with ASEAN and South Korea each. Sharma talked of forming a similar agreement with the US.

"If we take incremental steps to build on the strong foundation that we have, this partnership is defining and will bring about paradigm shift in the global architecture,” the minister said.

But the US commerce secretary Gary Locke who accompanied Obama in India was not as forthright in his announcements while talking to reporters.

“We have a variety of different agreements that we are working on. Everything will have to be done in stages and right now we have concluded many agreements. We are taking one step at one time,” Locke commented on Sharma’s proposal.

Locke also criticised India’s foreign direct investment (FDI) rules. During his speech to FICCI, Locke said, “More complicated and opaque rules of FDI too often discourage US investors from even entering the Indian market.”

Locke also added that the US seeks level playing fields for its companies working on new ideas and innovation.

But Sharma was quick to respond on the US complaints and said India follows a simplified direct investment regime. “We came out with a FDI policy in 1996. There have been many changes since then and all the changes have been incremental and progressive. This year, we have taken many steps,” Sharma noted.

He said the FDI proposals in most sectors are cleared through the automatic approval route. “Eight-seven per cent of the FDI which comes into India comes through this route,” Sharma commented.

India and US will have another high level trade talks in February, 2011 when Locke will visit New Delhi heading the delegation from Washington.