Jun. 24 – India and Europe are set to finalize a free trade deal by the end of this year that aims to boost bilateral trade to US$66 billion in the next five years.

Negotiations begun as early as 2007 but have proceeded slowly due to trade issues presented by both countries. An “in principle” agreement between India and the EU on the FTA was likely to be had by the end of this year said India’s Commerce and Industry Anand Sharma during a Global India Business Meeting held in Madrid.

The FTA’s timing for European businesses couldn’t be more apt as more businesses are making an aggressive push to expand in Asia and India to cope with slowing Western markets.

India on the other hand wants to attract more foreign direct investment in its agro-processing, tourism, renewable energy and infrastructure industries.

“If an industrial group thinks that it doesn’t have to be in India, it’s making a real strategic mistake,” said Germán Lorenzo, the Asia-Pacific managing director of the Mondragon Corporation. “Our domestic market is shrinking so our boys have to go for Asia, particularly India.”

India and the European Union are working towards a framework agreement by October in time for the Europe-India summit.