The Hindu Business Line : India, EU may wrap up FTA next year: Nath

New Delhi, Nov. 29 India and the European Union hope to conclude a Free Trade Agreement at the next summit meeting to be held in France in 2008, the Minister for Commerce and Industry, Mr Kamal Nath, said on Thursday.

Addressing the eighth India-EU business summit, Mr Kamal Nath felt that calling the agreement as an FTA was a misnomer. “India has been signing agreements with several countries which are much broader in nature than an FTA. But we have to look after the sensitivities of different sections including the sensitivities of subsistence farmers in India. We have been trying to get the United States to reduce their farm subsidy by a modest sum and even this has not yet happened,” the Minister said.

The Minister added that many extraneous issues including non-tariff barriers and animal welfare issues had been raised in the past. “These issues have to be rule based,” Mr Kamal Nath said.

Earlier, addressing the meeting, the EU Trade Commissioner, Mr Peter Mandelson, felt that it was important for the India-EU FTA to be “ambitious” and added that the “substance” of the agreement was more important than the actual timing.

“By deepening economic integration, India and the EU gain not only new markets but also bigger engines for growth. The FTA would significantly increase exports to the EU as also new investments into India, helping the Indian Government to attract the investment it wants for infrastructure improvements,” he said.

The EU Trade Commissioner felt that an ambitious FTA with India could provide a big boost to both economies and shore up global demand if the world economy begins to cool.

Delivering the keynote address, the Prime Minister of Portugal, Mr Jose Socretes, said that the European Union was not only committed to developing its relations with India but was also keen to further deepen the economic relations.

Higher FDI

Later addressing a press conference, Mr Mandelson said that India should tap opportunities from trading partners to develop services infrastructure in the country. He also said that the country should aim to get higher level of foreign direct investment into its economy. “India is shooting too low. You must raise your ambition and game”

EU is India’s biggest trading partner accounting for 18 per cent share of India’s foreign trade. For EU, India is the ninth trading partner – overtaking Brazil and Canada in 2006. EU-India trade was worth €47 billion during 2006.