India and the EU get close to revive talks on proposed Free Trade Agreement

EU and Indian flags at EU-India Summit in New Delhi last October (copyright EU 2018, Source: EC - Audiovisual Service)

EU and Indian flags at EU-India Summit in New Delhi last October (copyright EU 2018, Source: EC – Audiovisual Service)

At a moment in history, where US “trade war” is targeting China and protectionism is on the rise, there’s one country that has the potential to gain momentum on the stage of international trade: India. New Delhi has indeed the potential to write a totally new chapter of its history of trade with the West, as it is preparing to accelerate talks on a Free trade pact with the European Union. Senior officials from the two fronts are meeting in Brussels this week to try and revive the negotiations, which have been stalled for long. Substantial difference and open questions remain, but it looks like Brussels and the Asian giant are closer than even before.

Background

The EU and India are currently officially committed “to further increase their bilateral trade and investment” through the Free Trade Agreement negotiations that were launched in 2007. Since June 2007, both the sides have completed 16 rounds of talks and five stock-taking meetings on the proposed pact, officially dubbed as Bilateral Trade and Investment Agreement (BTIA). The negotiations for the pact have been held up since May 2013, hanging on some substantial gaps on crucial issues such as intellectual property rights, duty cut in automobile and spirits, and liberal visa regime.

Re-launch of negotiations

Last month, when a European Investment Banking delegation signed a historic loan to support solar investment in India, it became clear that the conversations between the EU and the Asian country were likely to revamp soon. French President Emmanuel Macron’s presence in New Delhi, when he co-chaired the first edition of the International Solar Alliance summit with Indian Prime Minister Narendra Modi at the beginning of March, has also raised hopes for the revival of negotiations on a free trade pact between India and Brussels. He and Mr. Modi indeed openly expressed their support to increase bilateral cooperation and to “timely relaunching” of negotiations on an India-EU free trade agreement.

At the end of last month then Indian Commerce and Industry Minister Suresh Prabhu indicated that negotiations on long-stalled free trade pact between India and the European Union could “resume soon”. “We have started working on India-EU FTA (free trade agreement) again. We have invited them and are looking at it,” the minister said at an event on March 26, a couple of weeks after Mr. Macron’s visit.

12 April meeting

Minister Prabhu’s words then assumed significance as, just a few days later, senior officials of India and EU announced they will meet in Brussels this week. In the April 12 meeting, India and the EU are purportedly expected to deliberate upon the long-stalled negotiations on the proposed trade pact, and to try and iron out differences. Which is something the two front have been chasing for long.

Key points

Discussions between Brussels and New Delhi are currently focused on key outstanding issues that include improved market access for some goods and services, government procurement, geographical indications, sound investment protection rules, and sustainable development. Brussels formally recognizes that India has embarked on a process of economic reform and progressive integration with the global economy, but a final agreement with the Asian giant is still pretty far. In general, the EU considers India’s trade regime and regulatory environment still very restrictive. Besides demanding significant duty cuts in automobiles, the EU also wants India’s import duties on wines and spirits and dairy products substantially reduced, and a strong intellectual property regime. European banks are also wary of India’s restrictive rules on priority sector lending and obligation on financial inclusion.

On the other hand, India is asking to granted data secure nation status by the EU, which is something difficult at the time being, as India is among the nations not considered as data secure by the Brussels. The matter is particularly important for all those Indian IT companies currently wanting market access, and for the prohibitive costs of compliance with the existing data protection laws the Asian country currently faces. Also, India claims there are still many barriers to movement of professionals including rules on work permits, wage parity conditions, visa formalities and non-recognition of professional qualifications.

Size of the game

The potential of the opportunity is huge. The total value of EU-India trade stood at €77.5 billion in 2015. The EU is currently India’s largest trading partner, accounting for 13% of India’s overall trade, ahead of China (9.6%) and the United States (8.5%). India is the EU’s 9th largest partner, (2.2% of EU’s overall trade with the world), after South Korea, 2.5%, and ahead of Canada, 1.9%). with the value of EU exports to India amounting to €38.1 billion in 2015.

The value of EU exports to India grew from €24.2 billion in 2006 to €37.8 billion in 2016, with engineering goods, gems and jewellery, other manufactured goods and chemicals ranking at the top. The value of EU imports from India also increased from €22.6 billion in 2006 to €39.3 billion in 2016, with at the top textiles and clothing, chemicals and engineering goods.

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

This billion-dollar campaign wants to protect 30% of the planet by 2030

UNICEF warns of ‘lost generation’ of Rohingya youth, one year after Myanmar exodus

EU Youth Goals – we are shapers not listeners

The link between migration and technology is not what you think

EU migration crisis again accentuates lack of unity and solidarity among member states

Superbugs: MEPs advocate further measures to curb use of antimicrobials

The refugee crisis brings to light EU’s most horrible flaws and nightmares

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

The road ahead to building a more sustainable world

EU voters not interested in the European Parliament elections. What’s behind this European Titanic?

EU-Singapore free trade deal gets green light in Trade Committee

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

Latin America’s cities are ready to take off. But their infrastructure is failing them

Towards the Rise of the United States of the Atlantic?

EU Court of Justice invalidates Safe Harbour and the game for thousands US businesses suddenly changes

COP21 Breaking News_09 December: The Draft Agreement Updated

African cities will double in population by 2050. Here are 4 ways to make sure they thrive

What does the future of energy look like, how do we get there, and who will benefit?

China Unlimited and the Chinese dream

In this Tokyo cafe, the waiters are robots operated remotely by people with disabilities

Statement by Cecilia Malmström, Member of the EC in charge of Trade, on the successful conclusion of the final discussions on the EU-Japan Economic Partnership Agreement (EPA) – Brussels, 08 Dec 2017. (Copyright: European Union; Source: EC - Audiovisual Service; Photo: Georges Boulougouris)

The EU and Japan seal free trade pact that will cover 30% of global GDP

The impossible end of the war in Syria

Brussels Vs. Google: The €1 bn EU fine and the US response

China’s New Normal and Its Relevance to the EU

Parliament sets up plan to fight the 3,600 criminal rings of EU

Women’s rights in Asia – how far have we come?

The EU Commission lets money market funds continue the unholy game of banks

Brexit mission impossible: Theresa May was so desperate that had to appoint Boris Johnson as Foreign Secretary

Is your business model fit for the Fourth Industrial Revolution?

The future of international election observation missions

There is a forgotten solution to climate change that we must invest in – nature

“An open China brings opportunities to Europe”, a Sting Exclusive by China’s Ambassador to EU

Investment and Financing under the Belt and Road Initiative (BRI): EU and Chinese stakeholders share their views at European Business Summit 2018

Breaking news: Juncker’s Commission mutant trojan horse is on the loose in Strasbourg

Lagarde: Keep feeding the banks cut down wages and food subsidies

Here’s what a Korean boy band can teach us about globalization 4.0

The Bank of China at European Business Summit 2015

AIESEC @ European Business Summit 2015: The power of an individual and how we can awaken Europe’s Youth

Africa-Europe Alliance: first projects kicked off just three months after launch

Does Switzerland really need more medical students?

ECB’s trillion has to be printed and distributed fast before Armageddon comes

EU and China seize momentum to enhance trade agreements in response to Trump’s administration

Is this a turning point in the fight against slavery?

Climate negotiations on the road to a strong Paris agreement rulebook

Moscow’s Eurasian Union lost significance after the crisis in Ukraine

A Sting Exclusive: “There can be no global deal on emissions without China and the USA”, Conservative MEP Ian Duncan stresses from Brussels

China confirms anti-state-subsidy investigation on EU wine imports

Migrant children at US border have right to protection and ‘be with their families’: UNICEF chief

Prosecution of Paraguay judges over peasant ‘massacre’ ruling could undermine rule of law: UN expert

Athens searches frantically for a new compromise between politics and economic reality

German egotistic inward turn to badly hurt Europe after Merkel’s exit

Get off the path of deadly emissions, UN chief Guterres to urge in key climate change speech

International community makes important progress on the tax challenges of digitalisation

We have a space debris problem. Here’s how to solve it

Access to healthcare: what do we lack?

SDGs and the historical and economic impact on Brazilian health

COP21 Breaking News_05 December: Ban Ki-Moon Closing Address at COP21 Action Day Innovation, Imagination, Faster Climate Action

The ECB ‘accidentally’ followed IMF‘s policy advice for growth and job creation by printing more money

5G mobile is nearly here – but we should share networks to make it affordable

To hope or doubt? The state of women’s progress in the world

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s