Commenting that India continues to be a closed economy, the United States on Friday urged the Indian government to open up the market in order to ensure a balanced trade between the two countries.

Ambassador David C Mulford was speaking to reporters after inaugurating the US pavilion at the annual food exhibition Aahar 2004 at Pragati Maidan in New Delhi.

He said the growth in India's economy, along with its demographic changes, would lead to changes in the country's retail sector, especially in large metropolitan areas.

Such changes would offer more quality products and choices to the consumers. But the policies adopted by the government were hampering growth in this sector, said Mulford who was speaking at his first public function in India after presenting his credentials.

He said: "This progress was being hampered by the ban on foreign direct investment in the retail sector (in India)."

"Removal of this restriction would accelerate the transformation of this up-and-coming sector, the realisation of supply chain efficiencies, and would provide impetus to the domestic food-processing sector, as well."

Reading out from a prepared text, he refused to answer any questions from the press.

Twelve US companies are participating in the food exhibition that started Friday having about 100 stalls from across the world.

On the market access, he said though US was one of world's most open economies, India continued to be one of the most closed.

"In agriculture, India enjoyed an $857 million trade surplus with the US in 2003. Over the past six years, US agricultural exports to India have almost doubled to $309 million in 2003."

"However, given India's population, growing middle class, and robust economic growth this figure is too small."

The ambassador said the US was willing to eliminate export subsidies and reduce domestic support but it could not be done unilaterally.

He said though Indo-US relations have improved but much more was required to be done in the areas of trade and investment.