"The relationship is growing, so that itself will propel momentum for stronger economic ties. But more than that the Indian economy is growing. If we are able to sustain robust growth in India then demand in India will also increase, for goods services, tie ups, Indian companies will become more global in their reach," Shankar told PTI.
Shankar, whose tenure as the Indian Ambassador to the US is officially coming to an end today, was the Minister Economy at the Indian embassy here when New Delhi liberalised economy in early 1990s.
"The India-US trade and economic relationship is unique because it is a relationship where both sides are benefiting, it is broadly balanced in both direction and it is growing in both directions. This year, again we have seen trade increase by 20 per cent in terms of figures of the trade in the first quarter of the year," she said.
One area where India clearly wants the US to focus is infrastructure, Shankar said. "Recent policy changes which are being made in India with regard to permitting the setting up of the infrastructure debt fund would propel new interest by the US Pension Fund and Insurance companies in investing in India."
"Till now our policy basically allowed foreign investment in infrastructure through equity. You had to invest directly in the project. But the infrastructure debt fund would mean that you could have long term debt instruments with long term payment. This could be 20 years, 30 years debt instruments of bonds," Shankar said.
Therefore, US pension funds and insurance companies which are actually sitting on quite a lot of resources might find this of interest in terms of outlet for their fund, which will get them the returns over a long period and India will find this of interest as this could provide financing for the priority sector such as infrastructure, she said.
"The Reserve Bank of India is currently drawing up guidelines for this purpose; the Finance Ministry has approved this in principle and I think once those are ready, then we should have new opportunities," Shankar said.
She said as the Indian economy grows, opportunities for trade and economic cooperation between companies in India and the US will certainly grow.
"Initially it was the IT sector, which took off. I remember, when I was here as Minister Commerce in the early 90s there was some cynicism that why we are so much focusing on IT.
"At that time we launched India US Commercial Alliance and we held a big conference with about 200 companies participating in the West Coast and Ron Brown as Commerce Secretary and P Chidambaram as Commerce Minister interacting then. At that stage the exports in IT were something in the range of may be USD 300 million," she said.
The India-US trade and investment flows have become far more robust, Shankar said.
"If you are looking at roughly a combination of goods and services trade then you are looking at something in a combination of goods and services in the region of USD 80-86 billion, which is quite a substantial increase of trade, you would see that India has moved up in terms of where it stand as a partner in the US' trade with other countries," she said.
The investment flows are now in both directions. "The US is our number one partner for technology collaboration and Indian companies license US technologies because they find it useful to use it and upgrade their own technologies back home.
"Indian rules for royalty payment for such technology collaboration and financial collaboration have again been liberalised. So that makes it easier," Shankar said.
Noting that there have been changes in the US export control regulations as they apply to India, Shankar said that this realignment will make it easier for Indian companies to license US high-technology when they require it.
"We have seen that the entities list has been modified – ISRO, DRDO, Bharat Dynamics have been removed from the entities list. The civilian nuclear power plants are also not on the entities list so there has been fairly significant change in terms of where India stands on export control regulations.
"And categorisation of India has also changed and we have been moved to much higher category... So these changes are still ongoing. I think there will be significant new opportunities in the high-tech collaboration," Shankar said.
The US has also agreed to support India's membership to four export control organisations.
"We have made progress in the sense that we are having consultations with these groups which the US has initiated for India's membership. India has also engaged in outreach. So this is very much on our agenda," Shankar said