Washington, July 12 (IANS): With a growing trust deficit muddling their business relations, India and the United States have agreed to prepare for a policy dialogue on trade and investment issues at the ministerial level.

Visiting Indian Commerce and Industry Minister Anand Sharma and the newly appointed US Trade Representative Michael Froman agreed to such a dialogue at a two-hour meeting here Thursday - their first since President Barack Obama's former top economic advisor took over his new role last month.

"The two ministers agreed on the importance of a strong, regularised and sustained dialogue on trade and investment issues between the two governments," according to a readout of the meeting issued by Froman's office.

"To this end, they directed their staffs to work together to lay the foundation for a successful ministerial-level Trade Policy Forum," the premier bilateral forum for the discussion and resolution of trade and investment issues between them.

Discussions in the TPF are generally organized around five focus groups covering Agriculture; Innovation and Creativity; Investment; Services;

Tariffs and Non-Tariff Barriers.

Froman, the readout said, assured Sharma that USTR "stands ready to engage immediately with our Indian counterparts on concrete steps to strengthen our bilateral and multilateral engagement."

The meeting covered a full range of trade and investment challenges and opportunities of interest to the US and India, both bilaterally and multilaterally, it said.

Sharma and Froman "discussed the importance of a positive innovation climate for all sectors, including green technology, pharmaceuticals, and information technology, and agreed to continue these discussions under the framework of the Trade Policy Forum."

Froman also underscored the importance of India's constructive engagement to a successful outcome at the World Trade Organization ministerial in Bali, Indonesia, this December, according to the readout.

In raising issues of interest to the US, Froman welcomed the announcement that India's Preferential Market Access policy is to be reviewed and modified.

Froman noted, however, "the continued concern of the United States and other trading partners regarding the growing number of other localization barriers" that "seek to favour India's domestic manufacturers, suppliers and innovators at the expense of foreign firms and workers."

For example, he cited in-country testing requirements for information and communications technology equipment, and preferential treatment for indigenous intellectual property.

Froman, the readout said, "highlighted the opportunity to jointly explore less distortive approaches in manufacturing policy discussions under the US-India Trade Policy Forum."

He also expressed the US concern regarding the recent developments in India's climate for innovation and protection of intellectual property-intensive goods and services.

Froman, according to the readout, emphasised that "it is possible to promote access to medicines in India without stifling innovations that can further public health objectives as well, and said the United States would welcome and support such policies."