New Delhi, Nov 24 (IANS): The signing of a Free Trade Agreement (FTA) between India and the US could play a cornerstone role in the long-standing bilateral trade and will double it to $300 billion by FY 2025-26, PHD Chamber of Commerce and Industry President Sanjay Aggarwal said.

Currently, bilateral trade stands at $143 billion.

The continued spread of Covid-19 and the associated global supply chain disruptions have greatly impacted economic activities and created an unusual degree of uncertainty in almost all the countries. At this crucial juncture, dynamic economies such as India and the US hold immense potential for refuelling global growth to a higher trajectory in the coming times, said Aggarwal.

He was of the view that the election of Joe Biden as the next US President would help in reinvigorating the bilateral economic agenda between India and the US, thereby facilitating economic growth, job creation, promotion of small businesses and rising trade and investment exchanges.

The talks of concluding a broad-based India-USA FTA would also get a significant boost encompassing a wide variety of sectors and removing market access barriers to unleash a higher trade trajectory, he said.

Combining goods and services together, the bilateral trade between India and the US has increased from around $96 billion in FY2014 to around $143 billion in FY2020.

Aggarwal also said that the decision of the government not signing the RCEP agreement is a "very bold and a welcome step" as the MSMEs sector would have been badly affected, particularly in electronics, chemicals, metals, textiles, and the dairy sector as other member nations of the RCEP did not address various key concerns expressed by India.

Currently, India's trade with 15 RCEP economies stands at around $220 billion. India runs a trade deficit with 11 of out 15 RCEP economies.

He noted that FTAs must be signed keeping two things in mind, mutually reciprocal terms and focusing on products and services with maximum export potential.

The focus should not be just on free trade but also fair trade that promotes a strengthened stance of India in various FTAs with its partner countries, he said.

"At this juncture, India should expedite trade talks with large markets like the US on signing a broader or full-fledged FTA. India-USA FTA will be gainful as compared with the FTA with RCEP economies," he said.

The growth of merchandise trade has also been recorded high with the US at 7 percent average YoY growth as compared with 3 percent with RCEP economies during the last 5 years period of FY 2015-16 to FY 2019-20, he said.