Saturday 20 / April / 2024
New Delhi: The European Union on Friday sought a fresh push by India to restart negotiations at the earliest for long-pending free trade agreement (FTA) between the two sides, saying failure to finalise it will have adverse impact on trade as India's bilateral investment pacts with several EU-member countries are expiring soon.
Vice-President of European Commission Jyrki Katainen held talks with Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman and apprised them about the urgency to start the stalled negotiations for the FTA.
Katainen said India's existing trade and investment agreement with The Netherlands will come to an end in two weeks while similar pacts with several other EU countries will expire in the months of March, April and May which will make it difficult for the European countries go for fresh investment in India.
As per European Union law, no member country now can go for bilateral trade and investment pact with India as the grouping is in negotiations for a EU-India Broad-based Trade and Investment Agreement (BTIA). By end of 2017, India's trade and investment pact with 23 countries are likely to expire, according to EU officials.
Katainen said EU considers India to be a very attractive destination for investment but absence of the BTIA may dampen the enthusiasm as there will be no protection to investment. He said in such as scenario the cost of the capital will also go up significantly.
He said failure to finalise the agreement will create legal vacuum in trade and investment between European countries and India as bilateral pacts are expiring. He also referred to India changing foreign investment model.
Asked about his meetings with Jaitley and Sitharaman, Katainen, who looks after issues relating to jobs, investment and competitiveness, said, "We did not get a clear answer on BTIA." At the same time he hoped negotiations between the two sides will start soon.
"If BTIA is solved, everybody will be benefited. It is a strategic issue for us. India is strategically important for us... We are ready to fast-track the negotiations," he told reporters.
The BTIA talks have been stalled since May, 2013, when both sides failed to bridge substantial gaps on crucial issues, including data security status for IT sector.
Launched in June 2007, negotiations for the proposed agreement have witnessed many hurdles as both the sides have major differences on crucial issues.
In the EU-India Summit in Brussels, the two sides had failed to make any announcement on resumption of the negotiations as many bottlenecks still remain.
The two sides are yet to iron out issues related to tariff and movement of professionals but the EU has shown an inclination to restart talks.
Besides demanding significant duty cuts in automobiles, the EU wants tax reduction in wines, spirits and dairy products, and a strong intellectual property regime.
On the other hand, India is asking for granting 'data secure nation' status to it by the EU. The country is among nations not considered data secure by the EU.
The matter is crucial as it will have a bearing on Indian IT companies wanting market access.
