By IANS,
New Delhi : With the European Union (EU) imposing fresh sanctions on Iran, the country’s oil supply issue will loom large when India hosts its summit with the EU next week.
The meeting is also expected to give a decisive political push to the dragging negotiations for a free trade area (FTA) deal.
Prime Minister Manmohan Singh will hold wide-ranging talks with the 27-nation EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso Feb 10.
The two sides are expected to discuss an entire gamut of bilateral issues, including accelerating trade ties in times of economic downturn, global financial crisis, climate change, counter-terrorism, the situation in the Middle East and the Iranian oil issue.
The EU leaders are expected to press India to follow the sanctions to pressure the Iranian regime that is suspected of developing atomic weapons under the guise of a peaceful nuclear programme.
But India has made it clear that Iran, which contributes around 12 percent of its oil imports, is far too important for its energy security and hence it will continue to buy Iranian oil.
This position is expected to be reiterated by Manmohan Singh at the summit, said government sources.
The summit’s key focus will be on ramping up economic ties as the European economies look anew at India, which is still growing at the rate of over 7 percent when the eurozone is caught in a stubborn recession.
The summit is expected to give a decisive push to negotiations for a broad-based trade and investment treaty that the two sides have been negotiating for years. The EU’s envoy to India has said there won’t be any signing of the trade deal, but the summit will provide an opportunity for crucial trade-offs that could set the stage for wrapping up negotiations by the middle of the year.
Early this week, Commerce and Industry Minister Anand Sharma briefed Prime Minister Manmohan Singh on the progress made in the FTA negotiations and the sensitive areas that require give and take.
The two sides are expected to announce a roadmap for concluding the pact at the summit.
With the security situation in the Afghanistan still fragile and the festering political instability in Pakistan showing no sign of ending, India and the EU are also expected to discuss initiatives for stepping up their counter-terror cooperation, said sources.
India and the EU have been negotiating a broad-based Bilateral Trade and Investment Agreement (BTIA) for around five years. The EU is India’s largest trading partner, with bilateral trade estimated to be over $75 billion.
The EU has lobbied hard for steep reduction in tariffs for export of its automobiles, wines and spirits to India. However, the Indian automobile industry is fiercely opposed to any kind of duty cuts and argued that it will hurt domestic manufacturers.
The EU has also been pushing India to open financial sectors such as banking and insurance, postal, legal, accounting, maritime as well as security and the retail sector.