Luxembourg on Monday said it would increase capital flows into India via its investments funds by setting up a legal framework and was working towards increased bilateral trade and other areas for economic cooperation.

"There are several areas of economic cooperation between Luxembourg and India where true opportunities exist. One is the iron and steel sector and the other field offering space for increased cooperation is the financial sector,"

Luxembourg's Minister for Economy Henri Grethen said in New Delhi, "With a history of 150 years in producing steel and being home to the headquarters of the world's leading steel company Arcelor, I am convinced synergies could be found in our natural interest," adding his country was looking at furthering its investments in the steel sector in India.

Referring to capital flows into India via Luxembourg, Grethen said, "To allow increased capital flows into India via Luxembourg investment funds, we are fully committed to establish a legal framework necessary to intensify economic relations between our two countries."

"We are looking to diversify the structure of our economy and external trade by putting particular emphasis on countries outside the European Union. In that regard, the evolution of India is observed with keen interest in Luxembourg and in the whole of Europe," Grethen said.

He said despite a continuous increase in bilateral trade over the last decade, in absolute terms trade volume remained "modest and below potential".