India, EU ‘not far from a deal on free trade’

Prime Minister Narendra Modi recently said in Germany that India and the European Union should resume the stalled talks for a “balanced and mutually beneficial” free trade agreement at the earliest. Launched in June 2007, negotiations for the proposed bilateral trade and investment agreement between India and the 28-member EU have been stalled since 2013. The EU Ambassador in New Delhi, Joao Cravinho, says both sides are close to kick-starting talks. In a telephone interview with BusinessLine , he spoke about a host of issues, including FTA talks, security cooperation and an upcoming bilateral summit. Edited experts:

How do you look at Prime Minister Modi’s European visit?

Well, it’s very positive. It allowed Prime Minister Modi to be in Europe for several days holding discussions with European leaders, business men and other stakeholders in EU-India relationship. In the cases of Germany and France, he had some particular business, but it’s also the case that in each of these countries he was also getting a very European message about the importance of the relations between the EU and India.

In Germany, Modi had said India and EU should resume FTA talks. What’s the current status of the talks, and when do you expect the trade deal to be concluded?

I am glad that this topic came up in Germany. We are fully supportive of this idea that we should get back to the negotiating table and look for finalisation. I had the opportunity to discuss this with the Minister of Commerce, Nirmala Sitharaman, and she’s available. The European Commissioner for Trade, Cecilia Malmström, is also keen. So, at the moment the only issue is one of logistics, of finding the right moment for them to sit down. We are actually not far from a deal.

We have been almost paralysed for the last two years. Nothing has happened in terms of the negotiations. But things have happened on the ground. And what’s happened on the ground is that in both Europe and India, I think there’s an increasing interest in solving the relatively small problems that still exist. I say relatively small because compared to the advantages either side would have from the successful conclusion of the negotiations what remains to be solved is actually quite small. So I am confident that once the Minister of Commerce and the Commissioner of Trade sit down, then we can actually conclude a deal within a few months, if there’s energy on both sides.

What do you think about the ‘Make in India’ campaign? How keen are the European companies on this initiative?

Firstly, I think the Make in India campaign is an extremely important initiative. For India, it’s very forward-looking. One of the elements for its success is European participation. We are the biggest trade partner for India, we are the biggest source of investment for India and the biggest source of technology. And so, in those circumstances for Make in India to be successful, you have to have European companies making in India. We have a lot of interest from the European side. But there are issues to be solved. It’s not just making in India for the Indian market. It’s making in India for the world. And this means actually making progress on a variety of fronts. It means making significant progress in terms of the taxation uncertainties, investment in infrastructure, ease of doing business in India, cutting through red tape, etc. So there’s lot of keenness from the European companies, but there’s also an awareness of the difficulties and the fact that these difficulties won’t disappear overnight.

When is the next India-EU summit expected to take place? One hears that the Indian government was piqued over delay in the EU’s reply on the Summit date...

There was an idea that the summit might happen in April when Prime Minister Modi was in Europe. But at the end of the day, this was logistically too complicated. There were issues about whether we had sufficient deliverables we need for the progress, for example on trade. But I am confident that towards the end of the year, we will be able to have an occasion when Prime Minister Modi and European Commission President (Jean-Claude) Juncker, European Council President (Donald) Tusk can meet.

Apart from trade, what are the other areas of cooperation between India and EU? Is there a scope for broader security cooperation?

We have got counter-terrorism and cyber security talks coming up next month in Brussels and that will be important for us to map out what we can do together in terms of security cooperation. Secondly, on the EU-India front, we are interested in participating in the Indian government’s flagship programmes. I am talking not just about Make in India, but also about programmes such as the Clean Ganga mission, smart cities and digital India. All these programmes have tremendous potential for cooperation between India and EU.

Thirdly, there are issues of global governance. The most pressing one at the moment is climate change. We have the Paris Conference at the end of the year. India is a major player in issues of global governance. EU is also a major player. That means if we can engage in a dialogue, we are going to have a considerably enhanced influence in global negotiations. The same on Internet governance. We hope that India’s position will be similar to ours with respect to net neutrality, freedom of expression online and so on.

Is the Italian marines issue causing any trouble in bilateral ties? The EU Parliament had passed a resolution in January that accused India of a “serious breach of human rights”...

First, we have to distinguish the roles of different institutions and the external policy of the European Union is conducted not by the European Parliament, it’s conducted by the External Action Service. There are always issues. We have quite an intense relationship. With respect to the Italian marines issue, we are all very keen that there should be a solution as soon as possible and in accordance with international law.

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