Mandelson in talks with India after Davos breakthrough

Peter Mandelson, Europe's Trade commissioner, will meet his Indian counterpart in London tomorrow in the first significant development since ministers claimed a breakthrough in world trade talks over the weekend.

Trade ministers at the World Economic Forum in Davos agreed a new timetable to strike a deal by the summer after four years of troubled negotiations.

The most important step was a deal to move simultaneously on all key issues - agriculture, services and manufacturing - after months of deadlock over the thorny issue of farm subsidies. "I think we've turned a corner on that this week," Mr Mandelson said.

Ministers have given themselves until the end of April to resolve a list of 33 issues and agreed to hold bilateral meetings to speed up the process. The EU trade commissioner will hold a a two-hour meeting with Kamal Nath, the Indian minister for Commerce, at the High Commission to discuss the world trade talks and specific bilateral issues.

Mr Nath has said the deadline gives about two working days for each of the 33 issues. He said tomorrow's meeting was aimed at exploring "what is your problem, what is your last line".

Observers are optimistic that India and the UK can provide a powerful axis in pushing forward talks that have broken down over deep mistrust between rich and poorer countries.

Amit Mitra, the secretary general of the Federation of Indian Chambers of Commerce and Industry (Ficci), said there was lot of common ground between the two nations. He said this included ending trade-distorting farm subsidies, opening up services and allowing the free movement of workers. "We have a very close working relationship with the UK," Mr Mitra said.

Ficci is in London for two days of meetings with UK ministers, MPs, think-tanks and business leaders to promote India as a destination for export and investment. It is baffled that less than 1 per cent of the UK's total £294bn of overseas sales in 2004 went to India.