India has to open its markets to the EU having benefited from years of outsourcing by Western companies, a UK trade minister has warned.

Alan Johnson told a business summit in Delhi that offshoring has helped domestic business in Europe to become more competitive but the process must be a two-way street. Services industries account for two-thirds of the gross domestic product (GDP) of the EU, while it is only half of India's GDP, Johnson said.

"We stand to benefit from Indian service providers, offshore and onshore." But Europe also has much to offer India in services such as retail, accountancy, advice on European company law, and insurance, he added.

His remarks come following concerns by politicians and unions that off-shoring work to India poses a threat to European jobs.

The EU and India announced a joint action plan on Wednesday that covers co-operation in a number of areas, including science and technology, the fight against terrorism, migration, and academic and cultural exchanges.