The Hindu Business Line : Consultations for finalising FTA negative list with EU in last leg

Explaining the current status of the ongoing EU-India Trade and Investment Agreement negotiations, for a bilateral Trade and Investment Agreement (BITA), which will include a FTA, here on Thursday at an interactive session organised by FICCI, Eastern Region, Mr R.S. Ratna, Director, Ministry of Commerce and Industry, Government of India, said industry consultations for finalising the Negative List (also called the Sensitive List) were at the last leg.

The EU, comprising as many as 27 countries, and India's largest trading partner, accounts for a fifth of India's total trade (21.1 per cent in 2006). These negotiations are pursuant to the commitment made by the respective governments at the EU-India Summit in Helsinki in 2006 to move towards a broad-based trade and investment agreement. BITA talks began from June 2007, and two rounds have been concluded.

He said stakeholders' feedback to the study commissioned by the Department of Commerce, through United Nations Conference on Trade and Development (Unctad), was being elicited through meetings at various centres, before the third round of negotiations is set to begin in Brussels from December 6 this year.

STUDY POINTERS

The Unctad study, based on current trends of India's trade with EU countries and the export market for specific products, has identified some 401 products (138 agri products and 263 non-agri items) in which no preferential tariffs would be offered (the Sensitive List).

Industry stakeholders are also being asked whether some items from the list could be removed, and if so, with relevant suggestions. Asking Indian Industry to comment whether a particular sector was more cost competitive, or less, vis-…vis the EU producers in the same sector sector, the Ministry is also seeking data on national employment provided by the manufacturer of a particular product, SSI/SME presence in the product category, and to what extent can after sales service affect the export- import of that product.

Mr Ratna said the Unctad study has been cleared with the State governments, and their views on product lists are also being sought before November 25.

Tariff base

According to the preliminary discussions in earlier rounds between the two sides, tariffs have to be liberalised on 90 per cent of the tariff lines, and only the remaining 10 per cent will include the Negative List. In so far as the FTA in goods and services is concerned, Mr Ratna said the agreement's draft text has already been exchanged.

During 2006-07 (April-December), India's exports to the EU stood at $19.2 billion against imports of $20.1 billion. India's top five exports to EU during 2006-07 were mainly textiles and clothing, mineral fuels and oils, gems and jewellery, iron and steel, and organic chemicals.

India's top five imports from EU for the period consisted mainly of machinery and mechanical appliances, gems and jewellery, electrical machinery and parts, iron and steel, and optical and medical instruments.

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