A day after presenting his credentials to President Pratibha Patil, the envoy said that Germany and India are all set to achieve their target of EUR20 billion (USD24.4bn) bilateral trade by the end of this year.
"I am very much looking forward to what the (Indian) Commerce Minister (Anand Sharma) envisaged with his European Commission colleague - to have the European Union-India free trade agreement by the end of this year," Steiner told reporters.
"That will be the important part of a long-term perspective and direction to the European Union-India co-operation. Under the present circumstances (economic slowdown), a lot of questions are asked wherever we go and doubts are expressed if the processes are dynamic enough.
"I think that if we have the settlement of this agreement, that will be a powerful signal despite these gloomy perceptions and a sign that we mean business to allow more trade and investment," he said about the FTA.
The FTA, the envoy said, will cover a very broad spectrum, including insurance and automobiles among other things.
The Indian automobile industry has raised an alarm over the sector being included in the FTA, claiming that it will kill investments and technology flow into the country, resulting in under-achievement of the government's automotive mission plan.
The European Union is India's largest trading partner and Germany the largest European trading partner.