India and the European Union share fundamental values starting with a commitment to freedom and democracy and to independent and free media. And these common values translate into similar or compatible views on most global issues.

IT IS my great pleasure to be back in India today for the 6th European Union-India Summit. Today marks another decisive step forward in EU-India relations. Today, we will mark our formal agreement on a wide-ranging and ambitious Action Plan to implement the Strategic Partnership between India and the European Union launched at the latest Summit. This is the main step forward this 6th Summit is set to achieve.

In this Action Plan, we outline areas where India and the European Union should be active and influential collaborators in global political, economic, and social developments. There are many such areas in which both sides will gain, ranging from enhanced political dialogue, to deepened and widened trade and investment relations, cooperation within programmes such as the Galileo positioning system and the ITER project on fusion energy, and increased `mutual understanding' through cultural and academic exchanges.

Why is it so important to embark on such an ambitious and far-reaching partnership?

First, there are few other major countries in the world with whom the EU has more in common in terms of fundamental values:

The EU and India share a common commitment to freedom and democracy, and to independent, free, and vibrant media;

We are strongly committed to ensuring respect for human rights and rule of law; and

We both view religious, ethnic and social diversity as a strength, and promote unity in diversity, through tolerance and solidarity.

These common values translate into similar or compatible views on most global issues, ranging from the role of the United Nations and the World Trade Organisation in global security and global governance, to terrorism, the sustainability of energy supplies, and environmental degradation. In sum, to ensure effective multilateralism and meet global challenges, we share a strategic interest to join forces as natural allies.

Secondly, economic ties have long formed the core of our close and constructive relationship. Yet bilateral trade and investment volumes, despite the impressive growth rates recorded over the past decade, remain well below potential.

The European Union is a major economic power, which accounts for more than 20 per cent of world GDP and 20 per cent of international trade. India's global economic profile is rising fast: the country has witnessed unprecedented economic growth in the past decade; has emerged as a leading origin of IT services and destination for offshoring; and is attracting ever larger amounts of foreign capital. In the coming decades, India is expected to overtake Japan as the third largest economy in the world.

To reap the potential benefits of more trade and investment between the two economic heavyweights that we represent, and to improve our economies' ability to face growing competitive challenges brought about by globalisation, closer economic cooperation is essential. The High Level Trade group that we will today create should help us advance in this area. Although it is, naturally, not possible to pre-empt the outcome of its discussions and its recommendations, we do expect it may open the way for future comprehensive trade and investment negotiations.

Thirdly, the EU and India are important regional players. The EU has successfully expanded from six to 25 members. Bulgaria and Romania are expected to join us in 2007, and negotiations with Croatia and Turkey are to follow. Furthermore, through the European Neighbourhood Policy, the EU seeks to promote peace, stability, and prosperity beyond its borders. And India, the largest democracy in the world, set to become the most populous country in the world by 2030, is a major force for stability in South Asia and beyond. Even more significantly, both the EU and India are emerging as major political actors on the world stage.

Hence, all the elements are in place not only for calling each other Strategic Partners, but to implement this endeavour through the concrete Action Plan we have in front of us. Given our track record and continued joint commitment, I am in no doubt that we will make this undertaking a huge success.

Also today, the EU-India Business Summit will confirm once again the close ties that exist between our vibrant business communities.

Today's meetings will most definitely be a success on this auspicious day of Ganesh's birthday! I am proud of the special relationship between the European Union and India, which today takes another important step forward and will bring enormous benefits to both the Indian and the European people.

(The writer is President of the European Commission.)