Jaitley said the relationship between India and the US had evolved into a very strong partnership in the last few years and goals like 'Mission-500' outline and re-emphasise the objective of the partnership.
"If one sees the opportunities that the defence and aviation sector in itself offers, increasing annual bilateral trade to USD 500 billion is not a distant dream," he told a Washington audience yesterday when asked if the USD 500 billion bilateral trade target was achievable.
According to the United States Trade Representative (USTR) figures, India was US' ninth largest trading partner with the total two-way trade of USD 67.7 billion last year.
It is loaded in favour of India, which runs a surplus of USD 24 billion.
Jaitley said a lot of US companies had made investments in India and now a lot of Indian companies feel comfortable in making investments in America.
"It is an exercise which requires to be taken forward," he said at an event organised by the Federation of Indian Chambers of Commerce and Industries held at the headquarters of the International Monetary Fund.
Jaitley said one of the suggestions which was mooted in the meeting with US Commerce Secretary Wilbur Ross was that the two countries must get back governmental participation in private sector conferences.
For the first a different concept is taking place in November when a large number of American businesses are travelling to India for the Global Entrepreneurship (GES), he said, adding that the exercise will probably be repeated in the US next year.
"This would provide a great opportunity for Indian businesses here," Jaitley said.
He said over the next decade or so India's aviation sector is all set for a huge expansion.
"US companies are a natural investor in that particular sector," he said.
"We have taken a huge initiative in the defence sector and we want these companies in partnership with Indian companies to set up manufacturing facilities in India itself," Jaitley said.
Responding to a question on land and labour reforms, Jaitley said they were not an immediate problem to the reform process started by the government in these two sectors.
"We have allowed the State Governments to make whatever necessary changes they want to make in land acquisition laws," he said.
Noting that the labour problem is overstated in India, Jaitley said the age of workers strike is long over in India.
There has not been any hurdle of substantial nature in several areas, for instance the reforms in the banking and aviation sectors, he said, adding that in the last three and a half years, the government has been broadly sticking to the fiscal deficit targets.
"We have realised the merit of trying to stick to that," he said.
The government was on target on direct tax, Jaitley said, asserting that on GST, it was too early to discover a pattern because of a transition phase.
"Our priority is to include fiscal prudence at a very high level," he said.
Jaitley said the government was trying to address the problem of non-performing asset on a very high priority.
This has two aspects. One is to recover what is recoverable. For this the government has created new laws, amended laws and have created a new machinery, which will probably take care of it, he said.
Jaitley said there was a need to strengthen public-sector banks so that their ability to lend in India is maintained.
This issue is at a high priority area for the government, he noted.
"I can tell you that when you undertake structural reform of this kind, there could obviously be short term impact, one quarter, for two quarters or so.
"But these transient impacts should not be construed as any form of a long-term challenge because I do see that the med-term and long-term impact of all these changes is certainly going to be very positive," Jaitley said while responding to a question on stimulus.