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The India-EU free trade talks, stalled for over two years, is expected to get a new lease of life with the Centre finally raising the foreign direct investment (FDI) limit in the insurance sector to 49 per cent. This was a key demand of the EU.
New Delhi will, however, wait for Brussels to make the first move as it was the EU that stepped back from the negotiations on the FTA (free trade agreement) in 2013 because it was not happy with what was on offer, a Commerce Ministry official said.
“We have been getting indications the last couple of months of the EU’s interest in restarting the negotiations. Now that the Insurance Bill has been passed, the interest will shoot up. But they (EU officials) have to approach us formally before talks can start,” the official added.
Top EU officials from the India Division recently told newspersons that the EU was ready to show flexibility in all issues that had stalled the FTA talks with India. Although India has raised the FDI limit in insurance to 49 per cent from 26 per cent, it does not automatically mean that it will be included in the FTA. “Negotiations will have to be carried out, and India will take a decision after weighing all options,” the official said.
Largest export blocThe 28-member EU is the largest export destination for India with the country shipping goods worth $51.63 billion to the bloc in 2013-14, accounting for over 16 per cent of its total exports. In 2013, India and the EU had narrowed their differences in a number of areas and agreed to open up the market for various goods and services, and seemed ready to wrap up the negotiations that started in 2007.
New Delhi had offered to bring down tariffs on wines/spirits and cars sharply, while the EU agreed to give more visas to professionals in all member-countries.
Talks got stuck as the EU wanted commitments in insurance, legal and retail sectors as well as government procurement while looking for even steeper cuts in import duties for cars.
New Delhi had said that both sides should accept whatever was on the table and more concessions could be provided as and when the situation on the domestic front changed.
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