India should reform its trade policies further and reduce tariffs to boost trade with the United States, Secretary of State for Washington Sam Reed said on Monday.

Addressing a seminar in Mumbai, Reed, leading a delegation comprising businessmen, corporate executives and officials from the State of Washington, said while India has reformed its trade policies it needed to make the system more transparent and reduce tariffs further to facilitate the growth of bilateral trade.

US is one of the largest trading partners of India with $1 billion trade happening every year, according to Indo-American Chamber of Commerce data.

The bilateral economic relations would also grow through outsourcing opportunities, he said, adding the opposition by some states in the US to outsource activities to India was a "short sighted" approach without any benefit.

Outsourcing would help US companies to make operations economical and face competition while ensuring quality of services, Reed said.

He said this was the first visit by any US-trade delegation to India after Sept 9/11 terrorist attacks.

"The recent twin blasts in Mumbai had also raised some apprehensions over visiting the place but we decided to go ahead with the tour. We need to work together to deal with terrorism," he said.

Essar group chairman Shashi Ruia said US has imposed 35 per cent tariff on some Indian steel products, which would be difficult to justify at the World Trade Organisation forum. Ruia said the barriers to trade, including tariffs, should be brought down to support bilateral economic and business relations.

On attracting foreign direct investment into the country, the Essar chairman said world-class infrastructure facilities, including education and healthcare, have to be in place as these are "first things that multinationals look for before considering to make investments".