EU-India Seal Trade Pact

Indian Prime Minister Manmohan Singh announced that both sides were committed to controlling global emissions. He added that India and the EU were working towards pragmatic solutions with industrialized nations and developing countries sharing the burden in accordance with population size and level of economic development.

"In order to achieve this, global action is needed by all parties, according to their common but differentiated responsibilities and respective capabilities, with developed countries taking the lead," said Singh and Portuguese Prime Minister Jose Socrates in a joint statement. Portugal holds the six-month EU presidency until the end of this year.

Measures provide allowances for developing nations

As a huge developing country, India, which is one of the world's biggest polluters, is not obliged to make cuts in greenhouse gas emissions under the Kyoto Protocol. Singh emphasized that developing nations should not be held to the same standard on emissions as Europe, and called for measures on climate change that do not "perpetuate poverty."

India and the EU agreed that the upcoming climate change conference in Bali, Indonesia, which runs from Dec. 3-14, should come up with a clear roadmap for controlling emissions beyond 2012 within a United Nations framework when Kyoto expires.

"This compromise must be obtained within common but different responsibilities," Socrates said.

Bilateral trade pact to greatly boost India-EU trade

The meeting marked the eighth EU-India summit and seeks to forge a closer strategic alliance and deepen cooperation on trade issues as well. Trade talks covered both a comprehensive bilateral EU-India trade agreement and the comprehensive Doha round of international trade talks under the umbrella of the World Trade Organization.

Singh indicated that he hoped that the trade and investment agreement that was negotiated could be in place by the next annual summit in 2008.

European Commission President Jose Manuel Barroso, who was also present at the summit, said that the trade pact was an ambitious one and would boost bilateral trade tremendously. India-EU trade stood at about 47 billion euros last year.

The EU is India's largest trading partner accounting for nearly 20 percent of the south Asian nation's total trade. It is also largest source of direct foreign investment. The total investment flow from the EU into India amounted to nearly $11 billion in the period from August 1991 to February 2007 according to Indian government sources.

The EU has earmarked 470 million euros ($690 million) to promote economic development over the next five years, according to an article that Barroso wrote in the Indian media on Friday.

Both sides also signed an agreement to strengthen cooperation in science and technology. The EU agreed to provide seven million euros for setting up the European Business and Technology Center in New Delhi in order to promote further links between the business and scientific communities.

Deal to lower trade barriers may be reached at end of 2008

India, the world's fastest growing economy after China, needs new export markets to maintain its record growth. EU trade commissioner Peter Mandelson, who was also in attendance, said an agreement with the European Union to lower tariffs and increase trade may be reached in one year's time.

India's exports, however, account for less than 2 percent of overall EU imports, and European companies have invested 10 times more in China than in India over the last five years.

Other topics on the summit agenda were a possible civilian nuclear cooperation accord with the United States, which would provide India with access to American technology after a 30 year embargo. India would first need to negotiate a safeguards agreement with the International Atomic Energy Agency before US President Bush can seek approval from Congress to make such an agreement operational.