Thaindian News

New Delhi, Dec 7 (IANS) Prime Minister Manmohan Singh leaves on a two-nation European tour Thursday during which India and the 27-nation economic bloc of the European Union (EU) will seek to expand ties, but a key free trade agreement (FTA) would remain inconclusive due to protracted negotiations over some problem areas.

Manmohan Singh, heading a delegation of Indian officials and business people, will address the 11th India-EU summit Dec 10. The summit was earlier scheduled for October but was postponed to December in Brussels. He will be in Brussels, Belgium, for two days and then Berlin on a day-long visit.

Secretary (West) in the external affairs ministry Vivek Katju told reporters Tuesday that the India-EU summit “will provide an occasion to discuss the expansion of the India-EU engagement”.

The EU side in the summit will be represented by President of European Council Herman Van Rompuy and President European Commission Jose Barroso.

Calling EU an “important trading partner of India”, Katju said that bilateral trade touched 70 billion euros last year, of which the goods sector accounted for 53 billion euros while services trade stood at 16.3 billion euros.

About the FTA, the official said: “The two sides have been in discussions to conclude a broad-based trade and investment agreement. Negotiations are progressing well and we are hopeful of concluding the agreement in early 2011.”

The two sides had earlier said the deal would be done by December 2010.

A status report on the progress of the negotiations will be presented at the summit and a timetable set by which the deal will be closed, a source informed.

The free trade accord is expected to help India’s apparel exporters garner extra orders worth $3 billion from the EU. It will also help generate 2.5 million jobs in India’s textiles and garments export sectors.

Katju said “some estimates” have projected that the bilateral India-EU trade will cross the 100 billion euro mark once it gets operational.

Asked about the problem areas obstructing the finalisation of the deal, he said: “There are certain confidentialities to the matter that ought to be respected. There has been progress and I won’t say anything beyond that.”

The two sides have already agreed to eliminate tariffs on 90 percent of all tradable goods. But what the two sides are currently discussing is an expansion of this list, with India asking the EU to abolish tariffs on 95 percent of goods, while the EU wants India to offer a tariff slash on 98 percent of goods.

According to sources, the key sticking points that remain unresolved include a clause on sustainable development, which seeks to bind India to a range of human rights and environmental commitments. Intellectual property rights is another area where India and the EU have found it tough going to find common ground.

During the visit, Manohan Singh will also have a bilateral meeting with Belgium Prime Minister Yves Leterme in Brussels Friday evening followed by a dinner.

The prime minister will visit Germany Saturday where he will have meetings with German President Christian Wulff and Chancellor Angela Merkel during his scheduled eight-hour stay in Berlin.

The talks with the German leadership will focus on bilateral, regional and multilateral issues of mutual concern, said Katju.

“The India-German relations are also marked by rapidly growing economic and trade ties. Germany is our largest trading partner in EU, one of the top investors and a source of technology,” he said.

This will be Manmohan Singh’s third visit to Germany since he became the prime minister six years ago.