India yesterday accused European governments opposing Mittal Steel's €18.6 billion bid for rival Arcelor of discrimination and warned that their intervention could derail fragile global trade talks.

Kamal Nath, India's trade and industry minister, said: "This is an era of globalisation, cross-border investment and liberalisation, not one in which investors are judged by the colour of their skin."

Advising EU countries to wake up to the rise of India and China as economic powers, Mr Nath said governments should allow shareholders alone to determine the bid's outcome. "Countries must wake up to the new economic architecture," Mr Nath said.

"The Indian government is very concerned. I raised this with Peter Mandelson [EU trade commissioner] on February 1st and will raise it again." Mr Nath's intervention reflects growing concern in India that non-tariff barriers are being erected across Europe and the US that will slow its emergence as a global economic powerhouse. Lakshmi Mittal, the Indian billionaire chairman of the steel group, wants to acquire Luxembourg-based Arcelor to create a huge steel company with an output three times more than its three nearest rivals combined. Arcelor has rejected the bid, saying a merger between the two companies would be illogical and likely to fail.

The outcry by some politicians in France and Luxembourg over Mittal's hostile bid has also been watched with concern by liberals in Brussels.

Mr Mandelson has said the commission will resist "the emotion of economic nationalism". A key player in the Doha round of World Trade Organisation talks to try to lower trade barriers, Mr Nath accused France of disrespecting cross-border investment guidelines that require foreigners and locals to be treated equally.

The Indian government will raise the matter with French president Jacques Chirac, who is due to visit India on February 19th. - (Financial Times service)