India is looking for greater market access in the European Union for items such as textiles and leather and seeking ‘data secure’ status to the country at the ongoing bilateral trade talks in Brussels where negotiators from both sides are making a last-ditch effort to re-start the stalled Free Trade Agreement (FTA) negotiations.
“With the US adopting an aggressive posture against its trade partners, including the EU, the bloc may be in a more flexible mood this time round. It could be a last political effort by both sides to save the free trade talks,” a government official told BusinessLine .
The India-EU FTA talks, formally called the Broad-based Trade and Investment Agreement (BTIA), were officially kicked off in 2007, but saw several ups and downs with disagreements over market access issues.
What India wants
In 2013, the BTIA talks reached a complete standstill as the EU was unhappy with India’s offers for items such as wines and spirits and automobiles as well as financial services and retail. India, on its part, wanted more market access for key manufacturing items, grant of ‘data secure’ status that would bring more off-shore business to its companies and greater flexibility in H1-B visa rules.
“There were at least five stock-taking meetings of relative positions of both sides since 2013, but so far differences could not be narrowed enough for talks to re-start,” the official said.
However, this time things could be a little different. “The EU, and also to some extent India, have been on the receiving side of the abrasive trade measures of the Donald Trump-regime in the US. Hard positions may see some softening,” the official said.
The Indian industry, especially the textiles and garments sector, is eager that India formalises the BTIA with the EU soon as its competitors such as Bangladesh and Vietnam enjoy preferential tariffs in the region.
Two-way trade between India and the EU is well balanced with India’s exports to the region in 2016-17 at $47 billion and imports at $42 billion. The EU accounts for about 17 per cent of India’s total exports.
When the talks broke-off, India had agreed to bring about significant cuts in tariffs for automobiles and wines and spirits, but it was not enough for the EU which argued that it had got a much better deal in its free trade pacts with other nations. The EU also wanted India to take commitments on market openings in financial services and retail, but New Delhi had its doubts.