The proposed India-EU free trade agreement (FTA) cannot be concluded without commitments on lowering import duties on cars and car parts as this was a politically sensitive issue for the bloc, EU Ambassador to India Tomasz Kozlowski has said.
“For political reasons no FTA will be approved in EU Parliament without having car and car parts included. We can have a very long transitional period but we need to include cars,” Kozlowski said at a forum on India-EU cooperation in trade and sustainable development organised by CII and EU trade body amfori on Friday.
India and the EU have been negotiating a FTA, officially called a Broad-based Trade and Investment Agreement (BTIA) since 2007 but has not been able to conclude it because of differences in some important areas. While the EU is unhappy with India’s offers in the area of automobiles and wines & spirits, India wants more access for its professionals and recognition as a data secure country.
Kozlowski said that the EU was ready to introduce substantial level of asymmetry to the agreement as it was aware that India was a developing country and not at the same level as Japan and Korea, but it has to be beneficial for both sides.
The 28-member EU will continue to be India’s biggest trade partner even if UK exit’s the group and is also the main source of technology to the country, he pointed out.
If both India and the EU lowered their levels of ambition, a deal could be possible, said Abhijit Das, Head, Centre for WTO Studies.
Das pointed out that the negotiations had been stuck too long on just a handful of issues and both sides need to ask themselves if they wanted to stick to an ambitious agenda and not conclude the pact or bring it down and have a deal.
The EU Ambassador said that there was a strong will on both sides to go ahead with the stuck talks was evident from the fact that since 2017 there had been extremely active contacts at the expert level, chief negotiators level and the Commerce Secretary level. “It means we are full of good will from both sides trying to narrow existing gaps,” he said.