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Chief negotiators from India and the EU will meet in Brussels on Wednesday to assess the progress in the proposed India-EU free trade agreement talks and try and narrow gaps in contentious areas such as professional visas, market access for cars, grant of data exclusivity status and commitments in retail and financial services.
The negotiators will take a call on the next ministerial meet based on what they achieve in the meeting.
Both India and the EU have expressed hopes to wrap up the over six years old negotiations for a Broad Based Trade and Investment Agreement (BTIA) this year, but a deadline for it has remained elusive.
“While some movement has happened on some of the contentious issues since the chief negotiators last met in March, hard positions adopted by some EU members on certain matters have to be relaxed if overall progress is to be achieved,” a Commerce Department official told Business Line .
Germany, for instance, is insisting on including an indefinite tariff rate quota on import of cars from Europe and an eventual zero duty on all cars despite generous offers of tariff cuts made by India.
“The EU can’t push us continuously and beyond reason as we have to protect the sensitivities of our industry as well,” the official said. India has already agreed to bring down import duties from 60 per cent to 10 per cent on about 2,50,000 cars from Europe over a period of five years. It may more than halve the duties on all cars imported from Europe.
The EU also wants more access for its dairy industry, while India’s dairy industry, dominated by small farmers, is putting up a stiff resistance.
Another problem area is that the EU wants India to take on binding commitments for Foreign Direct Investment (FDI) in retail and insurance. India is finding it difficult to meet this demand as taking a binding commitment would mean that it cannot change the rules in the future if the situation so demands.
EU is also frustrated because Indian Parliament has not yet passed the Bill increasing FDI limit in insurance from 26 per cent to 49 per cent.
India, too, has some interests that have not yet been agreed to by the EU. It wants the EU to mark it as a data secure country that would increase flow of sophisticated outsourcing business to it. It also wants the EU to do away with safeguard clauses for the increased professional visa that it has agreed to grant to India under the FTA.
“Then there is the issue of intellectual property that has been creating problems for some time. While India does not want to take on additional commitments on intellectual property, the EU is insisting on at least some concessions,” the official said.
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