EU, India vow to boost trade ties despite differences

The EU and India vowed on Tuesday to boost trade ties and tackle thorny issues through dialogue, after they risked overshadowing a significant meeting between the two sides in Brussels.

The European Union held its first-ever trade and technology council with Indian foreign, trade and communications ministers as they seek to bolster ties.

The EU is India's third-largest trading partner with trade in goods worth around $95 billion, and last year the two sides restarted talks for a free trade agreement.

Read | India plans to challenge EU carbon tax at WTO

But hours before the high-level meeting, the Financial Times published comments by EU foreign policy chief Josep Borrell urging the bloc to crack down on India reselling Russian oil as refined fuels including diesel into Europe.

"If diesel or gasoline is entering Europe ... coming from India and being produced with Russian oil, that is certainly a circumvention of sanctions and member states have to take measures," he said ahead of a meeting with the Indian foreign minister.

After Indian Foreign Minister Subrahmanyam Jaishankar met Borrell in Brussels, he dismissed the issue during a press conference when asked about the comments.

"I really don't see the basis for your question. Because my understanding of the council regulations is that if Russian crude is substantially transformed in a third country, then it's not treated as Russian anymore," Jaishankar said later on Tuesday.

There were also reports on Tuesday that India planned to challenge the EU's "carbon border tax" at the World Trade Organization.

The tax imposes environmental standards on imports into the bloc based on the carbon emissions linked to their production.

Indian Trade Minister Piyush Goyal said India was discussing the issue with EU officials.

"I'm sure that the intention is not to create a barrier to trade," he said.

"We have a long time ahead of us in which we will be working together to find the right solutions to this."

The EU's trade commissioner, Valdis Dombrovskis, echoed the commitment to dialogue but said the EU was "very careful to ensure WTO compatibility" and would apply the same price of carbon to imported goods as on domestic producers.