Feb 14: The non-concluded talks between the EU and India from 2007-2013 and discontinued thereafter seem to be on the verge of another set of meetings, with both sides keen on finding a common ground as was evinced at a meeting between the Indian and EU Representatives a week ago, writes Subhash Arora but the dream of duty reduction on imported wines still seems to be distant and illusionary
India and the European Union (EU) have held talks on re-opening the dialogue on the Free Trade agreement (FTA), that has been in discussion for many years since 2007. The meeting co-chaired by the Indian Minister of Commerce and Industry, Piyush Goyal and the European Union Executive Vice-President Valdis Dombrovskis a week ago, reportedly reiterated once again their interest in resuming negotiations for a comprehensive and mutually beneficial trade and investment agreements (FTA) ‘once their respective approaches and positions are close enough’.
In the meantime, they examined alternative approaches and looked into the possibility of opening new areas of cooperation, for instance in relation to the resilience of global value chains and regulatory cooperation, notably in relation to new technologies, according to the Indian Express.
Also: European Union keen on FTA with India despite Protectionist Policies
Talks to conclude a bilateral pact covering trade and investment began in 2007 and continued till 2013 but did not come through, given the differing positions on a number of subjects including movement of Indian professionals, environment issues, and high tariffs by India on items of import from the EU like wine and spirits.
India’s decision to relook at the trade pacts it had signed earlier also slowed the pace down of the talks. During the India-EU Summit last year, held virtually due to the Covid-19 pandemic, the two sides agreed to set up a high-level dialogue on trade and investment relations which would discuss all trade and market issues, as well as supply chain linkages.
According to Mint, the EU is reported to have remarked, “The two sides had open and constructive exchanges on a broad range of issues with the aim of enhancing EU-India bilateral trade and investment relations. Their discussion will feed into the preparation of the upcoming EU-India Meeting scheduled to take place in May”.
On the multilateral front, there was an exchange of views on WTO reforms and their cooperation in the WTO at this meeting.
"The two sides recalled their continued attachment to the rules-based multilateral trading system. They reiterated their commitment to cooperate to preserve, strengthen and reform the WTO, and to work together to make the twelfth WTO Ministerial Conference a success. The EU side proposed to hold a regular structured dialogue between the EU and India on WTO reform," said the statement.
Also: Indo-EU FTA Talks may start after Decade of non-conclusive Efforts
The two sides will also hold another round of the high level dialogue before the India-EU summit meeting in May.
Talks to conclude a bilateral pact covering trade and investment began in 2007 and continued till 2013 but did not fructify into an Agreement due to irreconcilable differences on a number of subjects including movement of Indian professionals, environment issues, and high tariffs by India on items of import like wine and spirits from the EU. Also, that was when Brexit was on cards last year. Now India will have to have a different treaty with the UK. Spirits have lost the significance somewhat as it relates more to the UK.
Interestingly, India reduced import duties on wine from the maximum allowed by WTO of 150% to 50%. But added an Agro-Tax of 100% so that there was no difference in the duties but the Agro Tax may be reduced to any number and there is some speculation that it might be getting ready to reduce the customs duty in varying degrees from 150% to 50%.
The last time the meeting was held in 2013, there were seemingly agreements on slab rates that would bring down the duties on expensive wines with no equivalents in the domestically wines, to 40-50%. Otherwise, the domestic producers have been vehemently opposing reduction of duties on the cheaper imports as they would not be able to compete with them with reduced duties.
Also: EU-India FTA may soon be on Back Burner
Although there seems to be a desire on both sides to reach a common ground of agreement or even a partial Treaty may be signed, our sources tell us that each country has to ratify the decision and the process could take a year even after the treaty is signed. So, don’t count the chickens before they hatch.
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