Blair visits India to promote EU and UK trade ties
(Reuters)
Updated: 2005-09-07 08:54

British Prime Minister Tony Blair will hold talks in New Delhi with Indian leaders on Wednesday on trade, politics and climate change as Britain and the EU move to strengthen ties with the emerging economic power, reported Reuters.

Blair's two-day India trip is part of a whistle-stop Asian tour that began on Monday in China.

Blair wants to see for himself the challenges posed by the Asian giants that are forcing the European Union and the rest of the world to change their economic strategies to compete.

"India is now the fastest growing democratic, free market country in the world and our trade links are growing all the time," Blair's spokesman said.

India's economy, the third largest in Asia, is set to grow at a robust seven percent in the fiscal year ending March 2006.

British Prime Minister Tony Blair (R) and his wife Cherie arrive at the airport in New Delhi Sept. 6, 2005. Blair is in India on a two-day visit. [Reuters]

Blair, who holds the rotating presidency of the EU, is accompanied on the trip by EU and British business leaders eager to gain a niche in India or expand business there.

"Our relationship with India could not be any better. It is at its peak, but trade is only scratching the surface," Karan F Bilimoria, chief executive of Cobra Beer Ltd, told Reuters en route from China to India.

Bilimoria, whose company already produces beer in India, said British firms must move fast, with U.S. companies also pushing to tap the Indian market.

Blair will be joined by Indian Prime Minister Manmohan Singh at an EU-India summit on Wednesday and hold separate bilateral India-Britain talks on Thursday.

Britain is the third-largest investor in India. Trade between the two countries is nearly $10 billion a year. The EU as a bloc is India's largest export destination, accounting for nearly a quarter of all Indian exports.

TACKLING GLOBAL WARMING

Blair is expected to urge India to join efforts to tackle global warming amid concern that developed countries' attempts to curb greenhouse gas emissions could be more than offset by pollution from Asia's fast growing economies.

Indian analysts said New Delhi should push Blair to open up protected European markets to Indian farm products.

Developing countries such as India say subsidies to European farmers give them an unfair advantage, and it is wrong for the EU and the United States to seek greater access to markets in poor countries before ending their own subsidies.

"India is expected to discuss issues of market access, particularly farm products, as part of the Doha world trade talks," said Saumitra Chaudhuri, economic adviser of the Indian credit rating agency ICRA. "That will be a key issue."

Indian officials said energy, including civilian nuclear energy cooperation, could also be included in the talks.

Britain said last month it would relax its controls on export of civilian nuclear technology to India, which earned global condemnation when it tested nuclear devices in 1998.

The British move followed Washington's promise of full cooperation with India in developing its civilian nuclear programme in return for separating civilian and military facilities.

Energy-hungry India is keen to boost nuclear power output from the current three percent of total power production to 25 percent by 2050 to offset massive imports of oil and gas.

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