India and the European Union on Monday decided to embark on a strategic partnership to strengthen economic and political ties and agreed to intensify cooperation and take action to facilitate and expand bilateral trade and investment flows.

A joint press statement issued after the 5th Summit between Prime Minister Manmohan Singh and the EU said the two sides decided to set up an energy panel to coordinate joint efforts in this regard.

The two side also agreed to work a new Joint Political Declaration for approval at the next Summit meeting, the 10-page statement said.

Observing that their partnership was based on a "sound foundation" of shared values and beliefs, it said both sides would encourage holding of regular, institutionalised exchanges between the Indian and European parliaments.

"We agree to intensify cooperation and take action to facilitate and expand bilateral trade and investment flows, given the importance of realising the potential of growing India and EU markets and the mutual benefits of increased economic interaction," it said.

At the Summit, the EU was represented among others by President of European Council and Dutch Prime Minister Jan
Peter Balkenende, President of the European Commission Romano Prodi, High Representative for Common Foreign and Security Policy Javier Solana and Commissioner in-charge of Trade Relations Pascal Lamy.

Besides the prime minister, the Indian side included External Affairs Minister K Natwar Singh and Commerce and Industry Minister Kamal Nath.