Indo-US economic relations have vast potential but pending issues like the one about the failed Dabhol power project need to be resolved, US Undersecretary of State Alan P Larson told visiting Indian businessmen in Washington on Tuesday.

At a meeting organised by the Washington-based Global Business Dialogue, of which the Confederation of Indian Industry is a member, Larson said that trade between the United States and India is growing quickly but it is still 'far too modest.'

"We need to increase it, not by percentages but by multiples, he told the visitors including Anand Mahindra, CII President, Arun Maira of Boston Consulting (India), T N Ninan of Business Standard, V Srinivasan of W S Industries (India), and Tarun Das, Director General of CII.

Both governments are working to make the Indo-US economic dialogue work and identify the issues where they can make progress and to establish timetables for addressing and resolving the issues, Larson said.

He cited Dabhol power project, which failed following a dispute between Enron, the US promoter of the project, and Maharashtra electricity board, the main power purchaser, as well as a problem in Tamil Nadu relating to a dispute with a power company as 'issues' that need to be addressed.

At this moment of great optimism about the Indo-US relationship, it is time for both governments to move forward but "we also have to solve some of those problems," Larson said.