India- European Union Trade Agreement expected to be ready early 2011

An ambitious Trade and Investment Agreement between India and European Union that could help in increasing bilateral trade by about 40% to touch €100 billion is expected to be finalised early next year.

"Negotiations are progressing well and we are hopeful of concluding the agreement in early 2011," Vive Katju, secretary (West) in the external affairs ministry, told newsmen today.

Katju was briefing media on the forthcoming visit of Prime Minister Manmohan Singh to Brussels and Berlin. 

Singh leaves for the Belgian Capital on Thursday to attend the 11th India-European Union(Summit) the next day.

He will be in Berlin on Saturday for summit talks with German Chancellor Angela Merkel before returning home on Sunday.

The bilateral trade in goods and services in 2009 was around €53 billion. The EU economic bloc comprises 27 countries.

"The Broad-Based Trade and Investment Agreement (BTIA) will give a fillip to bilateral trade which could increase to €100 billion," Katju said.

Katju refused to be drawn into a discussion over a delay in wrapping up the free trade talks this year itself or any contentious issues between the two sides.

The pact was to have been originally concluded to coincide with Singh's visit to Brussels for the summit.

"The free trade pact was originally supposed to have been finalised at the Brussels summit. But it is taking a longer time than expected," German ambassador Thomas Matussek told reporters yesterday.

Intellectual property rights and social issues like environment and labour standards are reported to be among some critical issues where the negotiations have got stuck.

Katju said a joint declaration on culture is expected to be signed between the department of culture and the EU Commission. The First India-EU summit was held in Lisbon in 2000.

The EU side will be represented at the summit by Herman Van Rompuy, president of the European Council and Joses Barroso, president of the European Commission.

An India-EU Business summit will be also held on the margins of the summit on the theme 'EU-India Partnership Opportunities for Sustainable Development'.

Prime Minister Singh will also have a bilateral meeting with his Belgian counterpart Yves Leterme in Brussels on Friday before proceeding to Berlin the next day for meetings with German President Chrisian Wulff and Chancellor Merkel.

Singh is visiting Germany for the third time after April 2006(when India was partner country at the Hanover Fair) and June, 2007 for the G8 plus G5 summit at Heiligendamm.

Katju said there is potential for diversification of trade, cooperation in the field of transport, and in steel, bio-technology and pharmaceuticals, aeronautics, science and technology.

He noted that India and Germany have traditionally enjoyed warm and friendly relations. "The bilateral relations are also marked by rapidly growing economic and trade ties," he added.

Germany is India's largest trading partner in EU, one of the top investors in the country and a source of technology.

Bilateral trade touched €15.4 billion in 2008 but decreased marginally to €13.09 billion the next year due to global economic crisis.

It has revived this year and is growing by over 15% and has reached €9.80 billion during January-August 2010.