Reports indicate that the European Union is keen to introduce "sustainable development" in its investment agreement with India and would like to introduce labor and environment targets despite the fact that both sides had agreed to exclude these topics. During the Helsinki summit in October 2006, the two sides decided on such exclusion and the Indian side is naturally wary of the renegotiation again under the banner of "sustainable development."

Aft3er EU Director General of Trade David O Sullivan brought up these issues, the Indian side reportedly agreed to discuss "sustainable development" in concept but not as part of the bilateral agreement which is slated to conclude by 2009. The scope of this agreement is expected to cover goods, services, investment, customs co-operation, and geographical indications. India has major interest to conclude the agreement so its services sector could expand and EU is interested in greater market access to industrial goods, banking, and insurance.

With India firm on excluding these topics, the agreement is bound for collapse if the EU insists on brining in these issues.