NEW DELHI (AP) — India and the European Union said Friday they agreed to speed up negotiations for a long-anticipated free trade pact, hoping to seal an agreement later this year that would nearly double tradebetween the two.
Prime Minister Manmohan Singh said considerable progress had been made during a one-day New Delhi summit with top EU officials in resolving market disputes that have prolonged free-trade negotiations into a fifth year.
"There are complex issues involved, but we have both agreed to expedite discussions," Singh said after the talks.
European Commission President Jose Manuel Barroso, who led the EU team, told reporters the two sides expected to reach a final deal in the fall. "The EU-India FTA will be the single biggest trade agreement in the world benefiting 1.7 billion people" — nearly a quarter of the world's population.
Both sides are anxious to reach a deal quickly to double trade to around $200 billion by 2013 from $107 billion this year.
The EU, following a year of economic turmoil, wants access to India's young and fast-growing market of 1.2 billion people.
For India, gaining easier access to European markets would bolster its reputation among major world economies. More practically, it could help India weather a recent economic slowdown that has seen growth rates fall from near 9 percent two years ago to below 7 percent today.
The EU is India's largest investor and trading partner, taking 19 percent of India's exports and supplying 14 percent of its imports. The European bloc has also invested more than $33 billion since 2000, while Indian investments in Europe amount to $30 billion.
"Greater investment flows in both directions is a win-win proposition," Singh said. India especially welcomes EUparticipation "in our growth agenda," he said.
Toward that end, the two sides signed cooperation agreements on sharing statistics and securing energy supplies by developing renewable energy technologies as well as improving the efficiency of power grids, buildings and appliances.
India has heavily used coal-burning power plants — accounting for 55 percent of today's electricity supply — to feed its fast-growing energy needs. But uncertainty over the price of coal and securing adequate supplies in the future have raised concerns about whether it can reliably continue fueling Indian growth at low cost.
While India is anxious to increase wattage, end chronic power cuts and reach 400 million people who still have no access, it has also said it is among the world's most vulnerable to climate change. The European Union, meanwhile, has pledged ambitious cuts to fossil fuel emissions that are blamed for global climate change, even imposing aggressive airplane emissions taxes recently that have upset the U.S., Russia, China and India.
India, meanwhile, is also pushing the EU to open further to Indian workers, and Singh said the two sides would talk further about easing travel for Indian tourists and professionals alike.
Indian merchants have much to gain from a free-trade pact. The country takes in only 2.6 percent of Europe's exported goods and supplies only 2.2 percent of its imports. Those numbers could jump drastically if it can meet European demands for finalizing a pact, including increasing intellectual property protections and lowering taxes on imported liquor and cars.
The Indian auto industry has loudly objected, saying such a move would kill domestic manufacturing.
Indian pharmaceuticals and health care workers worry new intellectual property rules will undermine India'sability to produce low-cost generic drugs for the world's poor.