India and the EU will soon begin negotiations on bilateral free trade and investment agreements and also launch a Trade and Technology Council to deepen cooperation in trade, trusted technology and security, European Commission President Ursula Von der Leyen has said.
“The EU is India’s third most important trade partner and one of its main investors. And we can do so much more,” she said at a bilateral meeting with Prime Minister Narendra Modi on Monday.
Modi and Von der Leyen reviewed progress in the “vibrant India-EU Strategic Partnership’’ and agreed to deepen cooperation in areas of trade, climate, digital technology and people-to-people ties, according to the Ministry of External Affairs.
The EC President said she was glad that India and the EU were starting negotiations towards comprehensive trade and investment agreements, and added that teams from the two countries will soon begin formal talks.
Trade, investment and GIs
This is significant as the EU, till last month, had been engaging mostly in exchange of letters with the Ministry of Commerce & Industry in India and was insistent that a number of its concerns be settled first. “India has already shown flexibility and agreed to include in the FTA in new areas such as sustainable development, climate and labour. It was finally conveyed to the EU that its concerns should be brought to the negotiating table and not sorted out through letters,” an official tracking the matter told BusinessLine.
While India has also agreed to the EU demand of negotiating agreements on trade, investment and geographical indications on separate tracks, an area of contention that remains is whether the pacts should be concluded separately or at the same time. “India has been insisting that the three agreements be concluded together to ensure that the goods agreement is not kept hanging while the other two get wrapped up. But the EU has not quite given its consent yet,” the official said.
Trade tech council
Modi and Von der Leyen also decided to launch a India-EU Trade and Technology Council. “This strategic coordination mechanism will allow both partners to tackle challenges at the nexus of trade, trusted technology and security, and thus deepen cooperation in these fields between the EU and India,” according to a EC statement.
The EU has a Trade and Technology Council only with the US, while for India this will be the first such engagement.
The Indian PM appreciated the EC chief’s work and said that under her leadership, India-EU relationship touched new heights. Von der Leyen was also chief guest at the inaugural session of the Raisina Dialogue. She held meetings at TERI and the International Solar Alliance Headquarters on Sunday and stressed on the need to work together to meet the climate challenge and adopt green energy.
Earlier this month, Commerce Secretary BVR Subhramanyam went to Brussels with a team of negotiators in the areas of trade, investment and Geographic Indications and the stage was set for the start of negotiations.
The FTA with the EU will result in greater market access for Indian products, such as textiles, leather, sports goods and processed food, into Europe as elimination or reduction in duties will bring Indian exporters at par with countries such as Bangladesh and Vietnam that already get preferential access. India also hopes to get more flexible visa norms for its professionals and workers.
The EU wants India to lower import duties on automobiles and wines and spirits and is also keen on greater access in financial services.
The EU is one of India’s largest trading partners with bilateral trade in goods and services in 2020 amounting to €96 billion, per figures shared by the EU. Its investments in India accounted for 16 per cent of total investments received between 2015 and 2020. The EU investments in 2000-21 amounted to €83 billion.