March 27: In what appears to have become a routine announcement almost every quarter, Indian commerce and industry minister Suresh ‘Prabhu on Monday hinted once again at an early resumption of negotiations over the long-stalled free trade agreement (FTA) between India and the European Union
Our commerce and industry minister, Suresh ‘Prabhu hinted yesterday again at an early resumption of negotiations over the long-stalled free trade agreement (FTA) between India and the European Union, according to an optimistic report in Financial Express.
“We have started working on the India-EU FTA again. We have invited them and are looking at it the minister said. Access to the EU market is crucial for a number of Indian sectors, especially textiles and garments and IT. (Also for import of wines from Europe-editor)
India is also a lucrative market for the European auto and pharmaceutical companies. At $43 billion, the EU (before Brexit) made up for 17.6% of India’s goods exports in the first 10 months of the current fiscal, while imports from the European bloc stood at over $39 billion. Garments were India’s biggest exports segment, followed by engineering goods and gems & jewellery. Similarly, the country imports capital goods and gems and precious stones worth billions of dollars from the EU.
As many as 16 rounds of negotiations took place between the two sides for the proposed FTA — officially dubbed as Bilateral Trade and Investment Agreement (BTIA), from 2007 to 2013 before formal talks broke down. Thanks to the impending elections, the talks between UPA government and EU broke down a year before the elections just as they were nearing a decisive phase, as was predicted by delWine a year prior.
Senior Indian and EU officials had met late last year to explore a way forward for the long-pending negotiations. Inflexibilities from both the sides and Brexit delayed resumption of formal negotiations. Differences have persisted on the broad contours of the proposed FTA, including EU’s insistence that India cut import duties on auto parts and wine and strengthen intellectual property rights regime and the Indian demand for more liberalisation in services and greater flexibility on data privacy.
India also feels the flexibility shown by it in further opening up to foreign investments in more than a dozen sectors should be considered positively by the EU. The matter is crucial as it will have a bearing on Indian IT companies wanting market access. On India’s strategy in view of rising trade protectionism, Prabhu has made veiled reference and hinted about new alliances, saying, “we have decided that we will be a country which will engage with all of our traditional friends, and at the same time, start making new friends”
For some of the earlier Articles in delWine, please visit:
EU-India FTA: And the Beat Goes On
EU-India FTA Talks Take Off in First Gear
Decision on restart of India-EU negotiations soon
Blog: European Union Beware
Blog: Treaty with EU likely to go on the Back Burner
EU-India FTA may soon be on Back Burner
Fine Wines from EU may get Cheaper Next Year
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