Brussels: India and the European Union (EU) will this week seek to resolve nagging differences over tariff and services which have considerably slowed down negotiations on the proposed Trade and Investment Agreement (TIA). Commerce Minister Kamal Nath will meet EU Trade Commissioner Peter Mandelson in London on later this week to give a push to negotiations on the agreement, which were slated to conclude by the end of 2008.

The negotiations were launched in June 2007 on the agreement that is intended to give a major boost to trade ties between the two sides. The decision to launch the agreement was taken at the India-EU summit in 2006 in Finland.

Differences over public procurement, opening up of services sector and tariff cuts on industrial goods have been nagging the talks, raising questions over the timeline would be met.

Both the sides have completed several rounds of negotiations on the agreement and have covered areas, including goods and services, government procurement, patent issues and trade facilities.

EU officials involved in negotiations said that the progress has been made on "easy issues" while there has been less progress on "difficult ones" and noted they are in no rush to conclude the agreement unless both sides get the best out of the pact.

"We would like to conclude the negotiations as quickly as possible. But for us substance is more important than speed. We will not sacrifice quality. We should not put a date till we get the best out of the negotiations," an official said to the group of Indian journalists visiting the country

The European Union wants elimination of at least 90 per cent tariff on industrial goods in the next seven years, a difficult proposition for India, changes in Indian procurement policy, which New Delhi even refuses to talk about, and greater market access for non-agricultural products. India has not yet presented the list of services and goods to be put in the negative list while the two sides are yet to begin negotiation on the common agricultural policy (CAP).

The EU, on its part, has come up with a list of 226 products, mostly chemicals, petrochemicals, plastics, ceramic and glassware items. Trade between India and the EU has doubled from USD 28 billion in 2003 to USD 55 billion in 2007 and the agreement is expected to boost the trade ties between the two sides. The EU is India's leading trade partner.

Recent studies showed that India's trade with the 27-member bloc could touch a whopping USD 572 billion. Of this, trade in goods could be around USD 251 billion and trade in services around USD 20 billion, when the agreement is fully implemented.

India exports agricultural products, clothing, chemicals, iron and steel to the EU countries and mainly imports transport equipment and power and non-electric machines

Though talks have slowed down, EU officials said that the negotiations are leading to a better understanding of each others' expectations. They claimed that India has agreed to negotiate on some issues which it has refused to talk about at the multilateral level.

On common agricultural policy, EU officials expect no major hurdles as there was no real clash of interest given the fact that the profile of the each others' produce and nature of expertise is completely different.

Both the sides are also negotiating agreements on Maritime Transport and Civil Aviation and expect progress and even conclusion of one of the agreements before the next India-EU summit, which could take place by the end of September 2008 in France.

The Maritime Agreement is expected to be a commercial one giving market access to companies from both sides while the Civil Aviation pact is aimed at technology sharing. (PTI)