Speaking during a visit to Brussels, Sinha also said attempts to revive the World Trade Organisation (WTO)'s liberalisation agenda, following the failure of talks in Mexico last month, would have to take greater account of the needs of developing countries.

"There is tremendous interest on the part of the EU in India. Trade is flourishing," he told reporters, evoking "shared values" between the two democratic partners in contrast to communist-run China.

P.K. Singh, India's ambassador in Brussels, added: "Our relationship with the EU is a relationship between two huge democracies. We have a civil society dialogue that they (the EU) could never hope to have with China."

Sinha acknowledged that China had enjoyed a two-decade-long head-start over India, which only began serious economic reforms in the early 1990s.

"But in the last decade, we have made faster progress than anyone else who has launched similar reforms," he said. "We are making very good progress, not only with the EU but with everyone else."

The minister said India had proved its growing trading influence in the region by doubling its exports to China in the first half of this year, and now enjoyed a trade surplus of 500 million dollars over its giant rival.

But he acknowledged India had to do more to attract greater foreign investment from the West.

"Some of the old impressions linger, and we have to work on changing them," he said.

Sinha was in Brussels for talks with EU External Relations Commissioner Chris Patten and foreign policy envoy Javier Solana before a fourth annual EU-India summit on November 29 in New Delhi, where they are expected to sign a customs cooperation accord and pledge to boost business-to-business links.

The EU is holding a summit meeting with China on Thursday in Beijing, with booming trade ties firmly to the fore of the agenda.

Sinha said he also discussed last month's failure of the WTO ministerial talks in Cancun with Patten and Solana, noting "a certain disappointment" from the EU officials that the liberalisation drive had stalled.

"We are also interested in a satisfactory outcome of the negotiations, but there are concerns that India has along with other developing countries," he said.