On 20 December 1993, a Cooperation Agreement between the European Union and the Republic of India was signed in Brussels by Messrs. Willy CLAES, as President of the Council of the European Union, Manuel MARIN, Member of the European Commission responsible for development cooperation, and Pranab MUKHERJEE, Commerce Minister of India. The main elements of the agreement signed today are the following. Respect for human rights and democratic principles is the basis for cooperation between the European Union and India and it constitutes an essential element of the Agreement, as stated in its Article 1 in line with all cooperation agreements concluded by the European Union with third countries. The principal objective of the Agreement is to enhance and develop cooperation, focussed in particular on : . facilitation of better mutual understanding and strengthening of ties between the two regions in respect of technical, economic and cultural matters; . further development and diversification of trade and investment in their mutual interest, taking into account their respective economic situations; . building up of India's economic capability to interact more effectively with the European Union; . acceleration of the pace of India's economic development, supporting India's efforts in building up its economic capabilities, by way of provision of resources and technical assistance by the Community within the framework of its cooperation policies and regulations, in particular to improve the living conditions of the poorer sections of the populations; . development in their mutual interest of existing and new forms of economic cooperation directed at promoting and facilitating exchanges and connections between their business communities, taking into account the implementation of Indian economic reforms and opportunities for the creation of a suitable environment for investment; . support of environmental protection and sustainable management of natural resources. * * * Under the guidelines of the new agreement, European Union-India development cooperation will continue to concentrate on activities helping poverty alleviation particularly in the rural areas (more than 215 million people live under absolute poverty, out of a total population of 845 million). Efforts in development cooperation are to be targeted : . in the social sector : primary education and welfare; . in agriculture : marketing and management of irrigation systems; . in infrastructure : employment creation in rural towns, rural water supply; . in the sustainment of the environment and wherever appropriate. * * * As far as economic cooperation is concerned, European Union assistance is aimed at : . promoting industrial competitiveness and market penetration in sectors where mutual interests of European Union and Indian businesses complement each other; . improving horizontal aspects such as standards through a national accreditation scheme, technology informations through the setting up of a technology information centre, and sustainable institution- building which are linked with the above sectors or which are perceived to provide future potential for cooperation and trade; . business to business cooperation and joint ventures of the European India and Indian private sector through the European Union-India Business Forum and ECIP; . reinforcing liberalisation efforts such as in maritime transport, facilitating access to business information and a better understanding on the implications and opportunities of the unified European Market; . reinforcing energy efficiency and related technology transfer through the EC-India Energy Management Centre; . strengthening the value of tourism as an employment opportunity in the form of eco-tourism, including game park and cultural tourism; . assisting specific industrial sectors of interest such as automotive components and upgrading of automotive, electrical appliances and food processing laboratories; . protecting the environmental from industrial pollution; . reinforcing mutual understanding of respective economic, social and cultural environment as a basis for effective cooperation, through linkages of training and higher education institutions, visits of journalists and cultural performances, films, etc. BACKGROUND Cooperation between the Community and India dates back to the early 1960s with India being one of the first countries to recognise the Community and establish trade relations. The first EC/India trade agreement of 1973 was replaced by a commercial and economic cooperation agreement in 1982 which has been developed into the new agreement. Development cooperation, initiated in 1976, expanded quickly. Given its size, India soon became the largest recipient of EC aid : since 1976 the EC has committed over 1.4 billion ECU, all in grants (94% development aid, 4% humanitarian assistance and 2% economic cooperation). The EC is India's largest trading partner, with a share of 25% of India's exports and 33% of its imports. Trade is about 1.1 billion ECU a year in both directions. The main items of India's exports to the EC are textiles, yarn fabrics, garments and jute (34%), leather (14%), carpets (6%) and engineering goods (5%). The EC's main exports to India are manufactured goods (machinery and transport equipment). India is ranking second (after China and now before Brazil) in the utilisation of GSP. Its economy has experienced an annual growth of approximately 5.5% of GDP in the 1980s. The GDP breakdown is 34% agriculture, 27% industry and 39% services. The Indian economy has a strong element of duality : while probably one of the ten most industrialized nations in the world, over one third of GDP comes from the rural sector, which employs three quarters of the population. Because land area under cultivation has effectively reached its physical limit, expansion of agricultural production to meet the needs of the economy and of a population growing at 2.1% per annum must come from intensification of production. Human capital is unevenly developed : while over 50% of the population are illiterate, there is a large pool of highly qualified manpower (10 million graduates). On 26 October 1992, the Council authorised the Commission to open negotiations with India with a view to concluding a new Cooperation Agreement. Two negotiating sessions took place (16-18 November and 7-11 December 1992), ending with the initialing of the Agreement.