European governments are threatening to break off negotiations with India on a free-trade deal the EU had hoped would be worth 175 billion euros a year, an EU report revealed on Tuesday.
Four years after talks began with New Delhi, frustrated European Union trade ministers have taken the decision to signal a fixed deadline for the deal of February 2012, at an already delayed bilateral summit.
Otherwise, they say, the offer would come off the table.
"A message will be passed to India that if by the time of the summit there is no agreement, there would need to be a pause in the negotiations," ministers agreed according to an official report on the talks.
An EU official confirmed the drastic threat, and said that of the 27 EU states, only Denmark spoke out against the high-risk strategy during the talks on Monday.
EU Trade Commissioner Karel De Gucht debriefed the ministers on a plan for fall-back positions which could see the EU accept less than it wanted in certain core areas.
Painstaking negotiations have been dragged down by big disagreements over "cars, wines, spirits and services," according to an official who attended the talks.
Given the mounting scale of the problems, the ministers backed the commission negotiators' so-called "landing zones" idea, but insisted that such "concessions will prejudice the EU in the long term," the official report read.
De Gucht hinted at a press conference on Monday that "at a certain point, it requires pragmatism" to reach an agreement.
His spokesman, John Clancy, said De Gucht only took the ministers' "general positions" on this fallback planning.
In an effort to jump-start the flagging negotiations, European Commission chief Jose Manuel Barroso will meet Indian Prime Minister Manmohan Singh on the sidelines of the G20 summit in Cannes, France, in November, and will also travel to Asia before the end of 2011.
Thirteen rounds of talks have been held since India and the EU started discussing a comprehensive market-opening pact in June 2007 to boost bilateral commerce.
The two sides originally hoped to conclude a wide-ranging deal by 2010 that could boost boost bilateral trade to $237 billion (175 billion euros) annually by 2015 from around $92 billion currently.
But India and the EU have already been at odds over intellectual property rights involving life-saving generic HIV/AIDS drugs and other medicines which are produced by Indian companies.
UNAIDS, the Joint United Nations Programme on HIV and AIDS, has expressed fears that EU proposals for the agreement could make generic HIV drugs unaffordable -- something that New Delhi has pledged to resist.