Free trade in services between India and the United States was a very promising field, especially in information technology, legal and accountancy services, a high-powered task force, set up by the Council on Foreign Relations and Asia Society, has said.

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Free trade in services would be an effective counter to the current adverse publicity in the US to outsourcing, co-chairman of the task force and former US Ambassador to India, Frank Wisner told reporters in Washington.

He however added that India and the US were not yet ready for free trade in goods.

Having moved from estrangement during the Cold War to engagement in the last few years, the two democracies -- US and India -- were now ready for the next stage, namely partnership, the task force, which included around sixty members from major think-tanks, said in its report.

It was co-chaired by Wisner, Nicholas Platt, president of the Asia Society, and Marshall Bouton, president of the Chicago Council on Foreign Relations.

Wisner said that the task force will be sending members to New Delhi, Islamabad and other capitals to sound the governments' reactions to the report.

With more than a billion people, democratic institutions, a large defence establishment, and a steadily growing economy, India represents "a partner of great value", the report said.

As the 21st century unfolds, India will have one of the world's largest economies and will become an increasingly significant security factor in the Indian Ocean region and in Asia as a whole, the task force said.

Despite policy disagreements with the US regarding Iraq and international economic and trade issues, India's government and people find increasing overlays between their interests and those of the American people.

It recommended that the US and India work to expand political, security, military and intelligence cooperation; intensify both official and nonofficial dialogue on economic and trade issues; and negotiate a trade agreement in services.

The task force also recommended that the US ease restrictions on cooperation with India in the civilian satellite sector, treat India as a "friendly" country in granting export licences for transfers of defence equipment and ease restrictions on the export to India of dual-use items that have civilian and military uses.

It also sought encouragement to US foundations, business, and scientific and educational institutions to expand efforts to develop cooperative programmes with Indian counterparts.