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EU urges India to offer more in trade talks

BRUSSELS - The European Commission called on India on Tuesday to go further with its plan to open up its economy to European exports under a bilateral trade deal being negotiated.

India has filed a first market access offer with Brussels, an important step in the negotiations for an EU-India trade deal which were launched last year, a spokesman for EU Trade Commissioner Peter Mandelson, told reporters.

"I can confirm that it is certainly a useful and worthwhile opening bid for a negotiation that will have to go further," spokesman Peter Power said.

"At this stage it would be unwise for me to put a timetable (on the talks) but certainly we would hope to see substantial movement in the next year to 18 months."

Mandelson wants bilateral trade agreements with several of Asia's big emerging markets as part of his plan to create new markets for European manufacturers and service providers.

At the same time the EU is deep in negotiations at the World Trade Organisation for a multilateral trade liberalisation deal, known as the Doha round.

The EU and India had about 46 billion euros ($72 billion) in two-way trade in 2006, smaller than might be expected for two of the world's biggest economies. EU trade with China totalled 254 billion euros in the same year, according to EU figures.

EU officials complain the south Asian powerhouse remains protected by an array of rules and regulations.

New Delhi sent its market access offer to Brussels in late April. The EU sent its offer to India in December.

Both sides have offered to remove all import tariffs on the 90 percent on goods, as measured by volume and tariff lines, within seven years and a next round of talks should take place before the European summer break, a Commission official said.

Difficult issues include lowering barriers to trade in services and opening up public procurement markets, he said.

The EU is an important source of foreign investment as India seeks to modernise, create jobs and fight poverty.

Analysts in India say a trade deal could take years with issues likely to be non-tariff barriers such as labour, environment, technical standards and climate change.

India is also negotiating a free trade deal with the Association of South East Asian Nations.

Progress has been slow due to disagreement on tariffs but Indian Trade Minister Kamal Nath said this month a deal could be struck in the next three months.