In the second stage of a major summit-level effort in Asia, the EU sought to consolidate relations with both rising powers in the region, when it agreed to a bilateral action plan with India on September 6-7th to give substance to their decision to become strategic partners.

This meeting also took place in a period of intense Indian and Chinese diplomatic initiatives and contacts, which in the Indian case, changed the nature of its relationships with neighbouring rival Pakistan and with the United States. In recent months, the Indian Government and Prime Minister had sharply stepped up the dialogue and cooperation with these countries, leading to an apparent new era of possible stability. The ties with the US had included new areas of security and nuclear cooperation that ended years of US sanctions applied in the aftermath of the country acquired nuclear capability.

Surveys released just ahead of the meeting related a benefit of these new relations and stability by indicating that India and the US were the second most favoured destination for investment by multinational companies.

A major part of the emphasis during the meetings was also put by Blair and the Indian hosts was their mutual preoccupation of combating terrorism. Blair and Singh at their joint press conference spoke of their zero tolerance for terrorism and the Joint Declaration also promised closer EU-India cooperation on the subject and related issues of terrorist financing and moneylaundering.

Another major element in the talks was also Indias continuing objective of seeking support for its permanent membership on the UN Sec

In general the meeting was hailed as a turning point in their relations.

In an address during his visit, Barroso stressed that India and the European Union share fundamental values starting with a commitment to freedom and democracy and to independent and free media. And these common values translate into similar or compatible views on most global issues.

He also pointed to the recent rapid economic rise of India and the possible expectation that Indian would in the coming future overtake Japan as the third leading economic power in the world.

He said the new bilateral action plan we outline areas where India and the European Union should be active and influential collaborators in global political, economic, and social developments. There are many such areas in which both sides will gain, ranging from enhanced political dialogue, to deepened and widened trade and investment relations, cooperation within programmes such as the Galileo positioning system and the ITER project on fusion energy, and increased `mutual understanding' through cultural and academic exchanges.

The Action Plan

The political chapter of the Action Plan outlines where the EU and India want to intensify their political dialogue and join forces on the international stage to address global challenges systematically. It emphasises the constructive dialogue on human rights and cooperation with the UN and establishes a dedicated dialogue on migration and consular issues.

The trade and investment chapter aims to promote two-way trade flows and investment. The Summit will entrust a High Level Trade Group with delivering recommendations in view of a possible comprehensive trade and investment agreement. Both sides will work towards enhanced cooperation on the Doha Development Agenda (DDA) and a successful Hong Kong WTO Ministerial.

The economic policy chapter aims to put the EU and its economic operators at the core of Indias ongoing reform process and to promote good governance. It proposes enhanced economic cooperation through the establishment of new dialogues and working groups (e.g. biotechnologies, pharmaceuticals, finance, health, social affairs, agriculture) and aims to promote space co-operation and Indias participation in Galileo and ITER.

The cultural and academic chapter, which builds upon the 2004 EU-India Cultural Declaration foresees the establishment of EU Studies Centres in India and vice-versa, Indias increased participation in the Erasmus Mundus student exchange programme as well as strengthened exchanges between civil society organisations and think tanks.

Blair said he viewed relations between India and the EU as being at a turning point.

The EU-India Summit must also be seen in the broader contexts of relations between the two sides and other partners. For example, the New Delhi Summit followed by just two days the 6th EU-China Summit in Beijing on September 4 which had become embroiled in the bilateral controversy over Chinese textile shipments to the EU as well as the regular, but also difficult, definition of their strategic partnership. While comparisons between India and China, their economic development, geopolitical roles and bilateral relations had grown into a global phenomenon and sometimes seemed somewhat contrived, they also had become almost inescapable.

The EUs relations with both India and China had been elevated in both substance and form in recent years as the two countries assumed increasing global political and economic importance. The EU had in the past year become the largest trading partner for both India and China. And although in terms of foreign policy, the EU presence and visibility had not reached perhaps their full potential, they had been boosted to strategic partnerships to encompass global political and security issues. The dynamics and ramifications of these expanded foreign policy and trade relationships into Asia had become an increasingly complex and new challenge for the EU beyond its generally perceived sphere of expertise and influence in Europe, the Middle East or Africa.

At their Summit meeting in 2004 in the Hague, the two had agreed to formulate an action plan to define and map the evolution of this new strategic relationship.

For India, the high-level contact with the EU also took place in the midst of what appeared to be a particularly active and fruitful series of international summits and visits by Prime Minister Singh abroad and guests to India. In the space of a few short weeks, Singh had concluded visits to the G-8 Summit in the UK, the US, Afghanistan, France and had also hosted a number of high-profile visitors. The results had proved to be a significant upgrading of Indias position on the world stage and something of a reshuffling of such relations, especially its links to the US.

Indias Commerce Minister Kamal Nath nevertheless complained that while India has steadily liberalised and opened up its economy to the EU and the rest of the world, he felt there had not been reciprocal benefits for India. He singled out EU health standards against Indian agricultural or fisheries exports, which he said did not always conform to international standards or the real risk involved but represented a non-tariff barrier to trade. Across the table, however, EU Trade Commissioner Peter Mandelson was voicing the same type of remark, urging India to make itself more open to foreign direct investment. Such a move, he argued, would improve the countrys effort to reduce or eliminate poverty. Figures in a survey released by UNCTAD at the same time indicated that India had become the third favourite location for FDI by multinational companies behind China and the US. Blair also sent out messages to both parties as he urged India to open further to trade and service but warned against protectionism in Europe."If Europe does not open up, if it thinks its future lies in protectionism, then it will lose in the end," he declared to journalists

On the first day of the E.U.-India summit, the Indian Prime Minister announced that the country's domestic carrier Indian Airlines would purchase 43 planes from the European manufacturer Airbus Industrie. The deal is worth around $2.2 billion. The E.U. had been hoping for such action despite the Indian government's ealier decision to contract Boeing, the American company that is the main rival of Airbus, for the purchase of planes for the national carrier Air-India.

Another important decision taken during the visit was to conclude a framework agreement on India's participation in the Galileo Satellite Navigation System. Galileo is competing with the United States Global Positioning System (GPS) and Russia's Global Navigation Satellite System(GLONASS) system.