The new Indian government should expedite negotiations on the Indo-European Union (IEU) free trade agreement (FTA), German Ambassador to India Michael Steiner recently said in an interview.

"I hope the negotiation will restart soon after the new government assumes office as the FTA is a win-win situation for all," Steiner said in New Delhi. The FTA covers a wide variety of areas such as insurance and automobiles to spirits and wines.

However, the Indian automobiles industry has raised an alarm over the sector being included in the FTA, claiming it will kill investments and technology flow into the country, resulting in under-achievement of the government's automotive mission plan.

Negotiations on the FTA, officially dubbed the Broad-based Trade and Investment Agreement (BTIA) between India and the 27-nation EU, were launched in June 2007 but have been facing hurdles with both sides having differences on crucial issues.

According to the Ambassador, the the business and political class of both sides are in favour of concluding the trade and investment agreement soon, as a similar agreement is in works between the EU and the US.

"India needs to grow at a very fast pace of about eight percent to reduce poverty and EU also needs to grow around a fast pace of about five percent and this can only be made possible when we have a strong agreement like FTA in place," the envoy said.

"It (India) should not miss this opportunity of getting aboard the FTA agreement, as the country requires investment and trade to grow further. There is confidence in the Indian economy; that's why so many German companies are working and investing here."

Germany is India's largest trading partner in EU.

Major German automobile manufacturers like Audi, BMW, Mercedes, and Volkswagen Group are present in the country. They have achieved healthy growth numbers, while the rest of the Indian auto industry faced a downturn.

Apart from automobiles, technology company Bosch, Siemens, airline major Lufthansa, high-end consumer durable company Miele and many other companies are present in the Indian market.

The latest to enter the Indian market are the wine makers who are trying to promote a select range of white and red wines, which the ambassador claims goes best with spicy Indian food.

The envoy elaborated the efforts being made by EU countries for resolving the European debt crisis, including the use of two major instruments like the European Stability Mechanism (ESM) and the Fiscal Compact.

"We have done a lot and have put in place certain key measures like ESM and Fiscal Compact to stabalise the EU zone," Steiner added.

The ESM provides for buying up to 780 billion Euros (around USD 1 trillion) sovereign bonds of euro zone countries which are under financial stress.

The Fiscal Compact envisages a singular economic governance policy for the euro zone, including monetary policy, and further integration.