Day before yesterday?on Monday, June 29?there occurred in Prague a meeting between India?s foreign minister SM Krishna and his EU counterparts (troika).

On the EU?s side were Czech deputy Prime Minister & foreign affairs minister Jan Kohout, the EU commissioner for external relations Benita Ferrero-Waldner and Javier Solana, high representative for the Union?s common foreign & security policy plus secretary-general of the EU Council. Frank Belfrage, Sweden?s state secretary for foreign affairs was also there since Stockholm is to assume EU?s Presidency from July 1 (today).

Held against the backdrop of the current financial crisis, falling exports and weakened financial institutions, the meeting sought uniform strategies and convergent responses to the contretemps. It addressed energy across sectors, reciprocal trade-access, plus climate change. As commissioner Ferrero-Waldner had already said ahead of Prague: ?This EU-India foreign ministers troika is timely as the EU and India must join efforts to confront global issues and regional challenges.?

It must be stressed that although the troika convened in order to set the scene for this year?s forthcoming Indo-EU Summit, it nevertheless lined up rather a spare agenda for the latter. The Summit will focus on trade relations, energy, security and climate change.

This could also be the right time to recall a cautionary tale which has been attributed to Unctad secretary general Supachai Panitchpakdi. Targeting all those who tend to be starry-eyed about the creation of FTAs, he notes that their eagerness can be traced to the suspension of the Doha Round?s suspended multilateralism. FTAs are sought after as some sort of ?second best?.

But, are matters that simple? Maybe not. Panitchpakdi also cautions against believing that FTAs are either as firmly rule-based as the WTO, or that they cover simply trade. Instead, many FTAs that do finally get thrashed out conceal numerous other motives and compulsions. It?s another matter that demands (or, refusals) that pertain to development are unrelated to investment flow, or trade. They also serve to draw a red herring across the ?path of real intent?.

Our intent is not to go in at the deep end (the non-economic conditionalities that somewhat obscure the essentials and objectives of FTAs). Instead, we simply allude to them without comment and then proceed to what seem to be authentic aims and objective conditions. We do this in the light of ?EU-India: A Strategic Partnership??a framework adopted in September 2005 by the European Parliament. Even at that time, EU rated India alongside the world?s most important actors?the US, Canada, plus the two other Bric economies of China and Russia.

The non-economic observations (for, they could hardly amount to more than that) started with strictures based on a May 2008 EC Commission report pertaining to counterfeit goods that had been seized at the EU?s ?external borders?. Other remarks in the EP?s March 26, 2009 document on the proposed FTA were actually suo motu observations that have been made in Strasbourg from time to time.

They have related to (a) the situation in India of Dalits (EP, February 1, 2007), (b) ?allegations of mass graves in Indian-administered Kashmir? (EP, July 10, 2008), (c) the ?restrictive? trade and regulatory ambience (EP March 26, 2009), (d) the utter destitution of 80% of Indians who (according to UNDP?s 2007/08 ?Human development Report?) subsisted on less than $2 per day (EP, March 26, 2009), (e) India?s 62nd rank out of 108 developing economies within the ?Human Poverty Index? (EP, March 26, 2009), (e) its lamentable role as the supplier of 30% of all seized EU imports of counterfeit medicines, (f) the laxity in enforcing IPRs, and, of course, (g) the continued refusal to sign the NPT.

?So, which side are you on?? is what feels tempted to ask after this litany. And, even more important, will such perceptions and findings enable the EU to impose quicker and more popular import embargoes?

If so, then the conditionalities and strictures clearly add nothing to either the elegance, or the appropriateness, of the FTA negotiating process. And these are good enough reasons to refrain from using them?either to threaten, or to use as bargaining chips.

And, perhaps most importantly, Strasbourg and Brussels surely realise (like do the other slow-growth OECD economies) that the EU 27 needs India just as much as the latter does?if not more?to hitch another ride to the erstwhile days of growth.

In other words, the collapse of WTO negotiations has been coterminous with the realisation that India has emerged as a big source of investment funds. From negligible amounts before 2004, it logged Euro 0.5 bn in investments in the EU in 2006, which, then, went on to attain Euro 2.4 bn in 2008.

That money is fuelling growth within the EU, while the Union?s savings seek out external locations?that is, host economies yielding higher returns, flexible factor markets and more stable market outcomes. The evidence in that regard is plain if we note what the Bric economies get from the EU: Brazil, Russia and China each had inflows of Euro 88 bn, Euro 52.2 bn, and Euro 32.7 bn respectively in 2006 alone, whereas India got Euro 12.3 bn. And, those were in the halcyon days.

Indeed, now that the OECD?s recession looks like it will persist, it does not surprise that the European Parliament members are avidly awaiting a successful conclusion to the FTA. (Their latest plea is that the agreement should have be initialed by 2010-end.)

In short, the FTA will have far-reaching consequences?both for policy, as well as how they affect the life and economic viability of Indians and Europeans. Clearly, it is neck and neck?in trade as well as investment. Cultivated properly, this process can lead on to the emergence of broad and multifaceted linkages between the two entities. This should be the time to bid farewell to strictures on internal matters.

?The writer is a fellow at the Maulana Abul Kalam Azad Institute of Asian Studies, Kolkata