``Let me say that the United States is eager to collaborate with India to increase the level of trade ... closer to the volume of trade we currently have with China,'' David Sampson, acting US deputy commerce secretary,

told American and Indian business leaders and scientists gathered under the US-India High Technology Cooperation Group, a forum to expand trade.

Sampson said while there had been much improvement in US-India strategic and political ties, only modest progress has been made in bilateral trade. President George W Bush was ``committed to transforming relations between the world's oldest democracy and the world's largest democracy.''

The US has made wide-ranging moves to improve ties with India in what analysts see as a counterbalance to China, whose growing military, economic and political clout has sparked concerns in Washington.

Sampson said India is at present only the 24th largest export market for the US, while American investments in India ``also tells story of growth but unrealized potential.'' US foreign direct investment in India amounted to US$3.6 billion as of the end of 2003. ``This makes the United States India's largest foreign investor,'' said Sampson. ``But US companies invest vastly larger sums elsewhere.''

Investors, he said, would be reluctant to act unless India's rules and regulations are streamlined and made more transparent and predictable.

One untapped potential for bilateral trade is in the high-tech sector, but Sampson said India needs to improve on recent legislation to extend product patent protection to pharmaceutical and agricultural chemicals.

He cited the need for India to fight copyright, trademark and patent infringement. Sampson said the United States and India have well-educated workforces for potential scientific and technological breakthroughs. ``I believe we're reaching a tipping point in biotechnology cooperation, agricultural and medical research, and the development of new pharmaceuticals,'' he said.

While pledging biotech investment reforms at the forum, Indian Science and Technology Minister Kapil Sibal asked the US to relax conditions for exporting biological materials crucial for rapid development of India's pharmaceutical industry. Conditions were tightened after September 11, 2001.

Sibal said the US and India could jointly establish protocols for such exports and licensing arrangements for transfer of US biological material to the private sector in India for vaccine development. ``That is one area that must be looked at immediately, because only then can we all jump on to the train to move to other destinations,'' he said.

India ranks fourth largest in the production of pharmaceuticals by volume, said Sibal, and wants to be the world's hub for vaccines and clinical trials.

Amit Mitra, secretary-general of the Federation of Indian Chambers of Commerce and Industry, said there are 900 biotech firms in India with turnover expected to hit US$5 billion in the next three to four years from the current US$1 billion. ``We can expand rapidly with joint collaboration with US,'' he said.