The US must make substantial cuts in farm subsidies and scale down demands for tariff reductions by developing countries to enable the stalled WTO talks to move forward, India's top trade negotiator said on Thursday.

India, meanwhile, would continue to hold discussions with other nations, upgrade technical knowledge, prepare arguments and 'wait for the US to get serious', Gopal K Pillai, special secretary in the commerce ministry, said at a CII seminar.

Pillai, the country's chief negotiator at the WTO, said farmers constitute just two per cent of the US population and their contribution to that country's GDP was around the same level. But the big agri-business corporations, which corner the majority of US farm subsidies, were holding the remaining 98 per cent of the economy 'to ransom', he said.

"US manufacturing and services companies, who would gain the most from a multilateral trading regime, must exert pressure on the administration to move forward," he said.

Pillai said the US has not agreed to cut its overall trade distorting domestic subsidies below its current levels and in fact, wanted the flexibility to increase the limit. 

"The US currently gives about $19 billion in farm subsidies and wants to raise it to $23 billion," he said and asserted until the US agreed to make real and effective cuts in agricultural subsidies, WTO talks would not progress.

Speaking on the occasion, WTO Deputy Director General Harshavardhan Singh said he was optimistic about the successful conclusion of the Doha Round, but the December 2006 deadline for completing negotiations would surely be missed.

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