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Dr Manmohan Singh said that he and Merkel were agreed on the “importance” of an early conclusion of a “balanced” India-EU FTA.
“We agreed on the importance of an early conclusion of a balanced India-EU Broad Based Trade and Investment Agreement,” added the prime minister.
“Economic ties have been a defining feature of our relationship. Germany is one of our largest economic partners globally.
“I encouraged increased German participation in India’s rapid economic growth and our plans to modernise and upgrade our manufacturing and infrastructure sectors,” said Dr Singh.
Germany pressed India to hike the foreign equity cap in the insurance sector and reduce tariffs on the import of automobiles as a prelude to the much-awaited India-EU Free Trade Agreement.
After talks with the Indian prime minister, German Chancellor Angela Merkel said that India and the EU want progress but have not yet overcome “all the difficulties” in reaching an agreement to conclude the FTA.
“We want progress in the signing of the EU-India free trade agreement. We are in a situation where it seems as if we can get there. We have not yet overcome all the difficulties,” Merkel told reporters while appreciating that the Indian were “accommodating” in paving the way for inking of the pact.
A hike in Foreign Direct Investment (FDI) in India’s insurance sector is critical to close the Indo-EU FTA.
Assuring his government’s committment towards liberalising the insurance sector, Singh said the Indian Cabinet has already approved a proposal and it is awaiting Parliamentary approval.
The Indian Cabinet has also cleared the hike in FDI in the insurance sector from the current 26 per cent to 49 per cent.
Germany singed six pacts with India in diverse fields including education, agriculture and clean energy.
The Technical cooperation would be implemented through the German Agency for International Cooperation.
“Our Infrastructure plans entail investment of a trillion dollars in the next five years. I also sought continuing openness and support to growing Indian presence in Germany, including in the services sector,” Singh said.