THE HAGUE, Nov 8: The European Union and India took their first steps towards a strategic partnership on Monday, marking New Delhi's arrival at the top table of nations after years of neglect as a poor cousin to Asian economic powerhouse China.

"India and the European Union are natural partners, we have shared values," Prime Minister Manmohan Singh said after talks with senior European Union officials in the Netherlands. "This will add strategic depth to our relationship."

EU officials emerged from the one-day meeting enthusiastic, declaring India a potential ally.

"The atmospherics were fantastic, it's a new era," said one.

Little was agreed on paper apart from a declaration on promoting cultural relations, and an EU commitment to offering 33 million euro ($42.50 million) for scholarships for 1,000 Indian postgraduates to study at European universities.

But the two sides agreed to come up with a joint action plan by the time of their summit next year which will set out the framework for their partnership.

Only five other nations have a "strategic partnership" with the EU: the United States, Canada, Japan, China and Russia.

The main thrust of their plan will be economic, with the EU looking to enjoy some of the fruits of India's vibrant growth.

The 25-nation EU is the leading foreign investor in India and its biggest trading partner. But China still accounts for more than five times as much European trade and 10 times as much EU investment as India.

"POLES OF STABILITY": The two sides agreed to improve access to each others' markets. The EU complains about Indian red tape and rules restricting foreign shareholdings in sectors such as civil aviation and financial services, despite 15 years of reform.