Quid pro quo: EU offers to ease visa curbs if India opens up insurance, Govt procurement

Amiti Sen New Delhi | Updated on March 13, 2018

EU Parliamentarians warn of delay in trade pact

The European Union has said it could convince its member states to commit to more visas for Indian professionals as part of the proposed bilateral free trade agreement (FTA). But this will be possible only if India does its bit: open up insurance and Government procurement and lower duties on automobiles and alcohol.

India has been upset with the 27-member trade bloc for introducing a clause in the FTA — till under negotiation — that would limit the benefits for professionals seeking freer movement in Europe. “We could dilute the visa safeguard once India agrees to deliver in the areas where our interests lie,” a senior official in the European Commission told Business Line.

The India-EU bilateral trade talk, formally known as the Broad-based Trade & Investment Agreement (BTIA), is stuck as the EU is not satisfied with India’s offers in insurance, Government purchases and market access for automobiles and wines and spirits.

New Delhi, on the other hand, is insisting on more professional work visas and recognition as a data secure country to attract more off-shore business from Europe.

Although the EU had offered 40,000 additional professional visas for entry into the EU every year, a caveat introduced recently allows members to impose curbs once 20 per cent of the number committed by an individual EU country is breached.

Talks stalled

Some EU parliamentarians, however, are not very upbeat on the future of the talks, which have almost reached a stalemate.

“It all depends on whether the Indian Parliament gets to pass the Insurance Bill in the Winter Session. Otherwise, it could take three years before the two get another opportunity to conclude a deal as both sides face elections next year,” said a parliamentarian, who did not want to be identified.

The EU wants India to raise the FDI limit in the insurance sector to 49 per cent from 26 per cent now. But it could happen only if the Insurance Bill gets passed.

And even when that happens, it remains to be seen if the Government can take binding commitments as it would be difficult for it to roll back the policy later if needed.

In the area of Government procurement, too, a Bill is pending in Parliament and India is not in a state to offer much till that is passed.

In the areas of automobiles and alcohol, where tariffs are very high, India has made offers for substantial cuts which it may find difficult to improve.

The BTIA is expected to create additional markets that would almost double bilateral trade to an estimated €150 billion ($200 billion) from about $110 billion last year.


Published on December 04, 2013

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