Warren Truss, Australia’s minister for trade, has pointed to India’s foreign ownership restrictions in sectors such as banking, and other trade barriers, as potential hurdles in any future bilateral free trade talks between the two countries.

Mr Truss said during a visit to India last week that the issue of a free trade agreement had been raised in discussions with businessmen and the localmedia but that India would need to address several areas before such a deal could be worked out.

“At this stage there are still quite a lot of barriers that need to be broken down in relation to trade issues – [the] banking sector, [the] capacity to invest in significant parts of the Indian economy and to be able to exercise some control in joint partnerships, opening up the mining sector,” Mr Truss told the FT in an interview.

The comments come as India is facing increasing pressure to liberalise ownership restrictions in several industries, ranging from the financial sector to the retail business, where global operators such as Wal-Mart are not permitted to own front-end stores.

In banking, foreign banks complain they are not permitted to hold more than 5 per cent of a domestic bank if they already have their own branch network.

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