India and Britain on Monday decided to set up a joint economic and trade committee to further develop a strategic relationship and to enhance bilateral trade and investment in specific sectors, including services and knowledge-based industries.

They also decided to establish an Indo-British Economic and Financial Dialogue on bilateral and global issues, on financial systems, and to enhance economic and financial cooperation.

The decisions were taken during the wide-ranging talks Prime Minister Manmohan Singh had with his British counterpart Tony Blair at a luncheon meeting in London covering all international and bilateral issues of mutual interest.

"We will enhance our dialogue on international trade and investment issues," a joint declaration issued by10, Downing Street, said.

It said, "Our economic ties will continue to expand. We will establish a joint economic and trade committee to further develop a strategic economic relationship, and develop business-led vehicles to enhance bilateral trade and investment in specific sectors including services and knowledge-based industries."

At this important time in the development of the international trade regime, "we will work closely together for a successful conclusion to the WTO's Doha Round of multilateral trade negotiations," the two prime ministers said.

The joint declaration said "the UK and India agree to expand co-operation in the fields of civilian nuclear activities, civilian space programmes, and high technology trade, in accordance with their international obligations."

Describing India and the UK as natural economic partners, it said, "As India emerges as a global power, trade and investment relations are becoming more diverse. Bilateral trade grew by over 20 per cent last year. We want this rapid growth to continue. But the real partnership lies in the strength of investment in both directions."

The UK is the second largest investor into India. India was the 8th largest investor in the UK in 2003. Britain provides an important bridge into the European market, attracting over 60 per cent of India's investment (in Europe), it said.

Stating that shared democratic values and a commitment to human rights, justice and the rule of law underpin relationship between the two countries, the joint declaration said, "We share a global vision of peace, security and shared prosperity, based on sustainable development.