Chicago: It is "premature" for the US to consider a free trade agreement with India, United States Trade Representative (USTR) Susan C. Schwab said on Wednesday.

Schwab said the US looks at trade agreements comprehensively and at this stage it is "difficult" for India to do such an agreement. She specifically mentioned India's "sensitivities" in the agriculture sector and said the US respected those.

Her comments came during the launch of the US-India Small and Medium-sized Enterprises (SMES) Summit here. The summit has been organised by the US-India Business Council and the Federation of Indian Chambers of Commerce and Industry (FICCI) to focus on SMEs as an important constituent of bilateral economic relations.

Schwab said SMEs were making a significant contribution to the economic discourse between the two countries and it was important that more attention was paid to them.

The summit was scheduled to be addressed by India's Commerce and Industry Minister Kamal Nath as well but he had to cut short his visit to be with his critically ill mother.

In his place, Commerce Secretary G.K. Pillai appeared to differ from Ambassador Schwab on the question of a free trade agreement. He said India was negotiating comprehensive free trade agreements with the Association of South East Asian Nation (ASEAN) and the European Union (EU).

Pillai also spoke of opportunities in India and how easy it was to set up industrial units there. In this context he gave the specific example of how it took the Finnish mobile handset manufacturing giant Nokia just 26 and a half days from application to producing handsets in India.

Pillai highlighted the contribution of SMEs to India's economy saying they account for 45 percent of manufacturing output, seven percent of the GDP, and employed 30 million people. He said 95 percent of industrial units in India were SMEs that produce 7,500 products accounting for 35 percent of direct exports and 15 percent of indirect exports.

Source : IANS