The announcement comes days after neighbouring China and the United States agreed to relaunch talks on a similar bilateral investment treaty.
"Yes, we are ready for it. We are in favour of a bilateral investment agreement," the semi-official Press Trust of India news agency quoted Indian Commerce Minister Anand Sharma as saying.
Sharma was speaking at the conclusion Friday of the Washington-leg of his official US tour but gave no timeframe for the treaty talks, the news agency said.
"Economic engagement in both trade and investment, though robust, is well below potential, given the opportunities a growing economy like India offers and the opportunities in the largest economy of the United States," Sharma added.
Sharma and Finance Minister P. Chidambaram have been in the United States this week meeting US political and business leaders to pitch for greater investment in Asia's third-largest economy.
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They are seek to spur India's economic growth which has been running at a decade l