Inter-ministerial consultations are being held to assess the implications such an agreement may have for the services sector in the country.
Official sources told Business Standard that the government had not yet sounded out the US authorities on the proposal.
The proposal has been mooted in the wake of some significant relaxations made for export of services by developing countries in the new draft text for a World Trading Organisation agreement finalised in Geneva last week.
If the proposal goes through, the existing quantitative curbs on the movement of Indian engineers, software programmers, scientists, accountants and other professionals to the US will be removed.
Similarly, the Indian government has to completely relax the restrictions on the opening of branches of US banks and insurance companies in the country.
It will become easier to travel to the US for education, just as the Indian health-care industry can offer its services to US patients without any restrictions.
Government sources pointed out that the impact of a free trade agreement on services with the US would benefit India in many ways.
According to them, India will benefit from cross-border trade -- banking or architectural services rendered through the telecommunications network or mail -- overseas services -- consumers travelling for tourism, medical treatment or to attend educational establishments -- and from movement of professionals to offer services -- software engineers working in foreign countries.
The only area of concern pertains to the offer of commercial services through the establishment of branch offices or agencies abroad.
