The two sides arrived at the decision during the 14th summit between Prime Minister Narendra Modi and the top EU leadership here.
India and the EU reiterated the importance of reconciling economic growth and environment protection and highlighted the importance of moving towards a more circular economic model that reduces primary resource consumption, a joint statement said.
"Leaders also agreed to further intensify cooperation on addressing environmental challenges, such as water management and air pollution, acknowledged the progress in implementing the India-EU Water Partnership, including an agreed action programme," it said.
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