As a first step in the improved cooperation agreed at today's summit (10 December), the EU and India signed a joint declaration on international terrorism.
"EU and India stand united in combating threats to international peace and security caused by terrorist acts," reads the declaration.
Mentioning the London, Madrid and Mumbai attacks, European Council President Herman Van Rompuy said terrorism knew no boundaries and a common response was essential.
Without mentioning Pakistan, the declaration underlines that both partners will "encourage all countries to deny safe haven to terrorists and to dismantle terror infrastructure on the territories under their control".
The EU and India agreed that the fight against violent extremism is an important step to fight terrorism. A closer cooperation is envisaged on cybersecurity, exchange of strategic information and law enforcement.
Towards a Free Trade Agreeement
The summit made a leap forward on reaching a free trade and investment agreement by next spring.
The EU is India's primary export destination and overall trade in goods in 2009 amounted to around €52bn.
"We believe it is not enough," said Van Rompuy. "In a still-difficult economic situation and where fiscal and budgetary policies are limited, free trade is a powerful engine in those circumstances to promote sustainable economic growth in two of the largest world economies, where more than one and a half billion people live."
Echoing Van Rompuy, European Commission President José Manuel Barroso said the free trade zone would boost global recovery.
"Over the last seven years, our bilateral trade has doubled. We should build on this momentum! We have recognised during the very interesting discussions today that there is much untapped potential in our economic relationship," he said.
Indian officials reportedly said the free trade agreement could increase bilateral trade to as much as €100bn.
If Europeans hope the trade deal will open India's booming markets to their banking, telecoms and consumer goods industries, India hopes it will give exporters and office service providers access to Europe's population of half a billion.
But the EU has repeatedly said it will back down on labour rights and environmental standards, two of the main sticking points in the negotiations.
Stumbling over generic medicines
At the margins of the summit, development NGOs have protested about possible clauses in the deal that would make it tougher for developing nations to buy Indian generic medicines, which for a few months has been one of stumbling blocks regarding intellectual property regimes.
Medecins Sans Frontières (MSF) complained that Germany, UK and France were pushing to undermine India's role as a producer of affordable life-saving generic medicines.
More than 80% of the AIDS medicines used to treat more than five million people in the developing world come from producers in India, according to MSF.
"A decade ago, people wouldn't even bother getting tested for AIDS because they knew the drugs to treat them were too expensive anyway," said Dr. Peter Saranchuk, HIV doctor for MSF in South Africa. "I refuse to go back ten years. We cannot let the Europeans shut down the supply of affordable medicines we and others rely on to treat patients around the world."
India's 2005 patent law fully respects international rules on public health. Patents are only granted for medicines that show significant innovation, which is a fact that has long upset the pharmaceutical industry in wealthy countries, argues the NGO.
European drug companies have actively – but so far unsuccessfully - sought to challenge the law in Indian courts. Having lost in the courts, the companies are now using the European Commission's trade policies to try to block competition on generic medicines, according to an explanatory note from the NGO.
According to critics, the Europeans are pushing provisions on "data exclusivity" during negotiations on a free trade agreement with India. The provisions would act like a patent and block the marketing of generic medicines for up to ten years. They would be applied to products that didn't deserve a patent in the first place under Indian law, acknowledged the organisation.
But European Commission sources say that Brussels and Delhi have progressed on this front and the problem has been resolved.
An EU official insisted there would be no need to change legislation as the agreement would rely on existing laws.