The normal review of the GSP has come at "an abnormal time" as the European commission will examine its continuation for India in the light of the implications of the nuclear tests. The report will be submitted to the European Council later this year.

The review covers the whole gamut of GSP regime of all countries for various industrial products. It is a complex issue and requires a thorough analysis, McGeever said. The system is designed to boost industrialisation in developing and underdeveloped countries by giving a fillip to exports. Various products which fall in the GSP category attract tariff benefits as per their importance.

As the issue is beingexamined, it would be premature to comment on the outcome, McGeever said. It is extremely important for India to be a part of the GSP regime and if the outcome is not in its favour, the consequences will be felt by Indian industry.

On the need to relate GSP evaluation with the nuclear tests when the EU has not imposed sanctions, he reiterated, "we do not believe that the act has contributed to bringing stability in the region. We have asked India and Pakistan to unconditionally sign the CTBT and NPT treaties."

On the impact of these sanctions, McGeever said that countries which had imposed them in the past later realised that their markets "have been stolen by someone else" and it takes time to make up.

India is important for the EU both politically and economically, he said. "We would like to enhance the partnership with India. There is considerable investment by Europe in the south Asian region. Several steps have been taken to enhance the EU-India partnership," said McGeever.

The EU-IndiaPartenariat, a major business meet in which around 400 companies will participate, is being planned early next year. This will not only create large business opportunities for companies in India and Europe but also encourage awareness about each other.

According to McGeever, the EU would like India to go in for globalisation at a faster pace but has realised that there are some internal problems and sensitive issues which require a degree of political consensus. "We would like to see the country as a strong trading partner to whom we are able to sell and we think that this is the basis of a good relationship in the modern world," he said.

Apart from this, a lot of work needs to be done on both sides to promote each other and create better awareness, Mcgeever said. EU has launched several initiatives like economic cross cultural programme to improve interaction.

India has a long tradition of parliament democracy, free press and thus it is easier for EU to establish a report with India than with a countrywhich has a entirely different set up and economic and political trends, he reiterated.

Better understanding and continuous dialogues are necessary to avoid friction and to resolve problems, McGeever said. "We have also agreed to meet between the major international meetings like the UN General Assembly.

It would be beneficial if we go to these meetings with common understandings on certain issues," he said.

China, McGeever noted, has managed to attract much more foreign investments than India. The common perception was that the route for investors there is probably clearer and more rapid than in India.