The two sides have disagreed over duties on car imports - India's tariff on European cars being nearly 10 times greater than Europe's on Indian vehicles - and access for India software companies to the EU market.
"For us the services sector is very, very important. We recognise the interest of the EU on wines and spirits, on automobiles," Trade Minister Anand Sharma told a news conference in the Belgian city of Antwerp.
"So it's not that there is a lack of recognition. It is fine-tuning the details that is on the table. It is not the substantive issues at all ... Most of the issues stand concluded to the best of my understanding," he said on the sidelines of the Global India Business Meeting.
Sharma said he would meet European Commissioner for Trade Karel De Gucht today (26 June) to assess progress.
India, Asia's third largest economy after China and Japan, has enjoyed two decades of rapid growth power by IT and outsourcing, even if manufacturing has lagged, weighed down by red tape and creaky infrastructure.
Sharma said India planned to increase manufacturing's share of gross domestic product to 26% within a decade from 16 percent now and would invest $1 trillion over five years on infrastructure.
The minister said he could envisage foreign companies investing in both sectors, particularly in planned greenfield industrial sites.
A Free Trade Agreement would help India's growing companies expand into the EU, the country's biggest trading partner and the buyer of more than €40 billion of Indian goods and services in 2010. Europe wants access to a vast, young market of 1.3 billion potential customers.
Negotiations started in 2007 and Sharma said the two sides had agreed to finalise an FTA by the end of 2012.
The minister stressed the need for both sides to reach a deal, particularly given economic stress. Europe's economy is expected to stagnate or contract slightly this year, while India's would grow by 6% to 7%, which Sharma described as "depressing" when compared to the norm of 9%.
"An ambitious free-trade agreement between the European Union and India will be the best message that the global economy can have in the challenging times," he said.