The Hindu Business Line : India, EU hope to close talks on FTA in a year: PM

The Prime Minister, Dr. Manmohan Singh, flanked by the President of the European Commission, Mr Jose Manuel Barroso (right), and the Prime Minister of Sweden, Mr Fredrik Reinfeldt, at the India-EU Summit in the Capital on Friday. – Kamal Narang

Our Bureau

New Delhi, Nov. 6 The Prime Minister, Dr Manmohan Singh, has expressed the hope that negotiations for a Free Trade Agreement (FTA) between India and the European Union can be completed in a year.

“There was a good bit of discussion on this subject. Both sides agreed that a broad-based trade and investment agreement is in our mutual interest. We have expressed the hope that the negotiations can be completed in one year,” Dr Manmohan Singh told the media at the Xth India-EU summit.

There is, however, scepticism on whether this is an achievable target as the two sides are far from reaching any understanding on the inclusion of many issues in the proposed agreement. While the EU reportedly wants the inclusion of a transparent public procurement policy, provisions on competition policy as well as labour and environment standards in the final pact, India has voiced its opinion against these.

However, EU has shown reluctance on India’s interests which include mutual recognition pacts on services and doing away with stringent tests on goods. There are also differences on the list of sensitive items (both agricultural and industrial goods) that should be excluded from trading.

At the summit, the two sides agreed to expedite the conclusion of a “balanced and mutually beneficial” broad-based agreement on trade and investment that will lead to increased economic opportunities and creation of jobs and wealth. Dr Singh also urged European businesses to increase their investments here.

The EU is India’s largest trading partner, accounting for about €77 billion in trade in goods and services in 2008. The EU accounts for 21 per cent of India’s total exports and 16 per cent of India’s total imports. It has been the biggest investor here with a cumulative volume of about €10 billion since 2000.

Movement of people

The Prime Minister also took the opportunity to urge the EU to facilitate movement of people, professionals, business persons, students, civil society and tourists through a friendly visa regime.

The two sides have identified trade and investment, energy, counter-terrorism, science and technology, climate change and movement of peoples as priority areas for cooperation, the Prime Minister said.

Addressing the media, the EU President, Mr Fredrik Reinfeldt, said there was potential to grow the strong relations that exist between India and the EU.

The Prime Minister was also presented with the EU mandate for the UN Climate Change conference scheduled to be held in Copenhagen next month.

Fusion energy pact

The European Atomic Energy Commission and India signed an agreement for cooperation in the field of fusion energy research.

The pact marks India’s formal participation in the International Thermonuclear Experimental Research (ITER) project, an ambitious multi-country fusion energy project to be based in Cadarache in France at an estimated cost of about €4.6 billion ($5.4 billion or Rs 25,000 crore).

The project involves the US, the EU, Russia, China, Japan and South Korea.

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