EU-India talks follow China visit

Asia is expected to become the new driver of global growth

The European Union (EU) is expected to hammer out details of a proposed free trade deal with India at bilateral summit this week in Delhi.

Such an agreement, which both sides want in place by 2008, would help support the global economy, EU Trade Commissioner Peter Mandelson said.

The talks come in the same week that EU officials met Chinese leaders to push for fairer access to China's markets.

The booming Asian economies are key to future EU growth, analysts have said.

On Friday the president of the European Commission, Jose Manuel Barrsoso, will meet with Indian Prime Minsiter Manmohan Singh.

It is thought they will put in place a timetable for future negotiations to thrash out an agreement that the EU hopes will reduce barriers to trades in goods and services.

Increasing intellectual property protection and boosting investment flows between the countries are also on the agenda.

Both sides have a lot to gain from an "ambitious" free trade pact, Mr Mandelson observed.

'More encouraged'

While India's economy has been expanding at a break-neck pace in recent years - second only to China - it is in need of hundreds of billions of dollars of foreign investment to sustain this growth.

"Spurring Indian economic growth (and) poverty reduction, is of course very good for India, but it would also take up the slack if, as is widely expected, other parts of the global economy begin to slow," said Mr Mandelson.

Separately, EU officials have been ratcheting up the pressure on China to reform its currency policy that they say is causing dangerous trade imbalances.

They also want Beijing to tighten its intellectual property protection laws to create a more level playing field.

Mr Mandelson has been deeply frustrated by what he has seen as China's intransigence over investment barriers and counterfeiting.

But after the summit, he said: "I arrived unhappy and leave more encouraged.

"There is a clearly stated political commitment by the Chinese leadership at the highest level to address the deficit including market access and intellectual property issues."

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