India considers EU textile offer


The EU is asking India, with its population of more than 1 billion, to open its markets

NEW DELHI, India -- India has begun its second summit with its largest trading partner, the European Union, where it is considering an offer by the 15-member trading bloc to grant textiles greater market access.

But a deal between the two is not expected soon, with the EU demanding that India open its markets and dismantle trade barriers in return.

"Our intuition is it's worth starting exploratory talks," European Trade Commissioner Pascal Lamy told Reuters news agency.

Lamy spoke at the second India-EU summit held since the forum was launched last year in Lisbon.

India has long complained about lack of access to the EU textile market, which it sees as one of its best hopes for gaining a foothold on the ladder of global trade.

But the EU is looking to India, with a population of more than one billion people, to remove its high tariffs and do more to encourage foreign investment.

The EU is India's biggest trading partner but India ranks only 19th among the EU's business partners, accounting for just 1.3 percent of total EU imports.

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Already Indian Commerce Minister Murasoli Maran has acknowledged that India needs to reform its markets.

Despite several liberalization measures taken in the 1990s, much of India's economy remains protected.

It has come under mounting pressure from the textile industry to make a deal with the EU for greater market access. Neighboring Pakistan forged such a deal recently.

The EU-India summit comes 10 days after the 142 members of the World Trade Organization agreed to launch a new round of talks to liberalize global trade.

India reluctantly backed a new WTO trade round after winning some concessions, notably the right of poor countries to override drug patents during health crises and sell cheap generic versions.

On Saturday, the EU mission goes to Islamabad for talks with Pakistan President Pervez Musharraf about the future of Afghanistan.