Though the government is keen not to be seen advocating the cause of individual business, the prime minister Manmohan Singh is expected to informally communicate to French president Jacques Chirac, who is due to visit India later this week, that any government interference in Europe to block Mittal Steel's $22.5-billion bid to take over Arcelor would be against the principles of international business freedom and would not go down well with the business community in India.

Mittal Steel has been facing resistance to his take-over bid for the French steel-maker Arcelor SA, based in Luxembourg, in which the government of Luxembourg is the largest shareholder with a 5.68-per cent stake.

Mittal Steel's take-over bid has triggered strong objections from the governments of France, Luxembourg and Spain and from labour unions worried about job losses.

Commerce Minister Kamal Nath's comments last week that Luxembourg could not be biased towards Indian-owned businesses and yet seek a double tax avoidance treaty with India today led to representatives of both countries stating that Mittal Steel's bid was not a bilateral issue.

Officials of the government of Luxembourg said that unless the government of India communicates officially that the talks would be called off, they would continue the negotiations.

Anand Sharma, newly appointed minister of state for external affairs the Mittal issue was a purely business issue and those who believed in free trade and investment should respect that.

Belgium, which owns a 2-per cent stake in the European steel company, has maintained neutrality with Didier Reynders, Belgium's finance minister maintaining that Europe should get used to investments by Chinese and Indian companies. He advised Europeans to find out more about Mittal Steel's offer before making a decision.

Nath will also take up the issue with European Union trade commissioner Peter Mandelson.

Yesterday EU's director-general (trade) David O' Sullivan, who was in Delhi, said, "The EU is of a clear view that nationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits." (See: EU official strikes moderate chord on Mittal's bid for Arcelor)

However, the commerce ministry is concerned at reports that the Luxemburg is planning to pass a law to enable companies to block take-over bids instead of leaving the decision to shareholders.

An Assocham business barometer (ABB) survey revealed earlier this week overwhelming support from Indian businesses for Mittal and highlighted that the 95 per cent of the respondents dismissed as "misplaced" European fears of the take-over as "xenophobia".