Policy

India, EU narrowing gaps in trade pact to re-start negotiations at Lisbon Summit

Amiti Sen New Delhi | Updated on April 07, 2021

Trade Ministers may meet before Modi, EU leaders meet on May 8

India and the EU will focus on narrowing broad differences that have been holding up the long-pending broad-based trade and investment agreement (BTIA) this month, so that the announcement on re-launching the negotiations by leaders of the two sides at the India-EU bilateral Summit in Portugal in May becomes a possibility.

“The two sides have decided to make serious efforts to get the stuck issues moving and the negotiations re-launched at the Summit in Portugal. Officials from both sides are likely to meet at the diplomatic level this month to discuss how existing differences can be best addressed,” a source tracking the matter told BusinessLine.

Also read: UK PM likely to visit India on April 26, sign pacts on non-tariff barriers, services

Prime Minister Narendra Modi is scheduled to attend the India-EU Summit in Lisbon on May 8 and will then travel to France for a bilateral visit.

Background

Negotiations for India-EU BTIA, launched in 2007, were suspended in 2014 following differences over market access demanded by the EU for key items such as automobiles, wines & spirits, dairy and financial services. India’s demand for easier movement of professionals and data secure status was also an area of debate.

A number of attempts were made subsequently to re-start the talks but failed especially as the EU also wanted labour, environment and government procurement issues to be part of the pact.

Renewed interest

However, with new leadership taking over at the EU and the European Commission in December 2019, there was renewed interest in the trade talks reflected in the first High Level Dialogue between Commerce & Industry Minister Piyush Goyal and European Union Executive Vice-President & Trade Commissioner Valdis Dombrovskis in February 2021. Both Ministers agreed to hold regular interactions to re-initiate the bilateral BTIA at the Dialogue.

Also read: WTO revises upwards its projection for global trade volume growth in 2021 to 8%

“There is a possibility that the Indian Commerce Minister and his EU counterpart will meet later this month to take stock of all pending issues and finalise how negotiations could re-start,” the source said.

While nitti-gritties of the BTIA are to be discussed when negotiations re-start, there has to be a broad consensus on what can or cannot be included in the negotiations and also what the red lines for both sides are, the official added.

The EU is one of India’s largest trade partner accounting for $ 45 billion of exports (14.36 per cent of total exports) in 2019-20. India is also seeking to get into an FTA with the UK, which has now exited from the EU.

Published on April 07, 2021

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