Protectionist approach on FTA in India: German envoy

Negotiations on the India’s FTA with the EU had started in 2007, and since then 16 rounds of discussions have been held at the chief negotiator level.

By: ENS Economic Bureau | New Delhi | Updated: September 21, 2016 2:45 am

Listing down the benefits to India by resuming free trade agreement (FTA) negotiations with the European Union, German Ambassador Martin Ney on Tuesday said that Indian representatives have an “unrestricted protectionist reflex” when it came to discussion of continuing the FTA talks.

“Sometimes when we talk about resumption of FTA negotiations with parts of society and political parties, I find somewhat unrestricted protectionist reflex that is hovering in discussions,” Ney said, adding that by not negotiating the agreement, India was aiming low by focusing only on the domestic market, rather than targeting the global market.

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“World trade is being integrated through international and regional FTAs. If India is not a part of this exercise of setting the standards of free trade, someone else will set the standards…It is of strategic interest for both of us,” the German envoy said.

Negotiations on the India’s FTA with the EU had started in 2007, and since then 16 rounds of discussions have been held at the chief negotiator level. However, since 2014, when the 16th round was held, the negotiations have been suspended as the negotiators were not able to arrive at a compromise solution to address the EU’s key demands. The union had sought that India eliminate duties on automobiles and wines and spirits while India’s main demands included those on data security status, which are key for the country’s information technology sector. India had also sought easier temporary movement of professionals in the services sector.

Ney said that if India continued its focus on meeting the demands of the domestic market, it would never produce goods and services of world-class standard. He also pitched for a new investment protection agreement between India and EU, suggesting that it would be key for the economic relations between the two parties in the future.