India needs to provide assurances to the European Union that it is looking to hike the foreign direct investment limit in the insurance sector to give a push to the free trade agreement with India, people close to the development have said.
“In the case of cars, a compromise is possible which will look after the interests of both India and EU. Compromise must be between those who say that they must have very high customs barriers and those who say that in the end there must be a zero. Let us assume that Parliament, in the second half, goes for the Insurance Bill…. That is very important for many countries to have this signal from the Indian side. All the rest is at a level where people will say if we have car thing solved and we have a compromise and on wines, and in the case of India, access to the IT market. Insurance is very, very decisive,” a senior official said.
On whether talks of a US-EU free trade deal could put pressure on negotiators working on the FTA with India, the official said these negotiations were likely to take up a lot of time and effort.