Narendra Modi-led BJP govt looks to address European Union concerns over market access

Narendra Modi govt is favourably inclined to address key concerns of EU over restricted access to Indian mkts.

New Delhi | Published:June 7, 2014 12:08 pm
The Mayor had earlier sought time from Modi for the meeting that lasted around  45 minutes. The Mayor had earlier sought time from Modi for the meeting that lasted around 45 minutes.

The Narendra Modi government is favourably inclined to address key concerns of the European Union over the restricted access to Indian markets. A bilateral meeting between on June 26 will discuss EU demands, including raising the foreign investment cap in insurance, sources told FE.

Brussels is also pressing for changes in India’s public procurement policy to accommodate European firms, besides a non-adversarial tax regime in India, with the dilution/removal of the recent retrospective changes in the country’s tax laws.

Among the main objectives of the meeting of the apex forum for India-EU trade, economic and development issues – called the India-European Commission Joint Commission – is re-starting the bilateral trade and investment agreement and expediting its conclusion, official sources added.

They said New Delhi will also seek more technology transfer from the EU and greater investments from EU companies in India’s infrastructure sector, instead of focusing too much on lesser important issues, such as the recent EU ban on mango imports from India.

The EU, they said, had ‘disengaged’ itself from the Broad-based Bilateral Trade and Investment Agreement (BTIA) talks for over six months as the UPA government was unable to meet their demands.

The talks were stuck also because India did not relent on the EU’s demand to eliminate or drastically reduce duties on auto (mostly luxury vehicles), auto-components and wines and spirits. EU also wanted greater access in India’s financial services market, besides high-level Geographical Indication protection for its items, including cheese and olive oil.

On India’s demand for greater market access in services, particularly cross-border supply of services (outsourcing), the EU, citing instances of breach of data protection, had expressed concerns in giving India ‘data-secure’ status. India also sought easier movement of its service professionals and wanted EU to remove its ‘restrictive’ safeguard clauses to facilitate this.

The EU wanted foreign investment in insurance to be hiked from 26% to 49% and has been waiting for Indian Parliament to pass the Insurance Laws (Amendment) Bill. The Bill, among other things, allows foreign investors to hold up to 49% in Indian insurance companies.

When the UPA government proposed the 49% foreign investment limit, the BJP had opposed it, but now the Modi government is considering the 49% limit without proportionate increase in shareholders’ voting rights. The FDI cap may be relaxed initially in non-life segments, followed by life insurance. The move could bring relief to the EU’s FTA negotiators, the sources said.

On opening up of procurement by the Central government and its entities, the EU was keen to see the passage of the Public Procurement Bill by Parliament and wanted India not to accord any preference for local firms in such procurement. The total annual public procurement in India is estimated at Rs 12-15 lakh crore and, therefore, is an important market for foreign players, including the EU.

The Bill aims to ensure transparency in such procurement and prefers open competitive bidding. As a safeguard, it exempts procurement for security, strategic purposes, procurement in public interest and those for disaster management.

On retrospective tax legislation, the Modi government has said it should be avoided, adding that it will provide a stable fiscal and legal policy with an aim to remove uncertainties troubling investors.

 

Arun S|The Financial Express

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  1. J
    john
    Jun 8, 2014 at 1:29 am
    "When the UPA government proposed the 49% foreign investment limit, the BJP had opposed it"Yeah...Its funny how you forgot that Atalji govt. also proposed it and at that time Congress opposed it.
    Reply
  2. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    As it turns out, the prohibition against outsiders buying land in Kashmir was introduced by the Dogras who bought the territory from the British in 1846 under the Treaty of Amritsar...(and) this ‘special status’ of Jammu and Kashmir allows it to 'retain' the Dogra-era law prohibiting outsiders from buying land.
    Reply
  3. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    At Golden Temple, the holy place of Sikhism. Talwaars coming out at the Golden Temple. They might have mistaken over certain issues but certainly there were no malafide intentions on their part.... And this crusade will go a long way I think.
    Reply
  4. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    Don't try to avoid their failure in the name of political failure, how come inspite of big army terrorist enter in India and kill us. Why our army waits for political order if they can't act by their own they should resign & do something else
    Reply
  5. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    Mangal Pandey was the first revolutionary for Independent India. He didn't succeed but he gave birth to a strong desire in the hearts of Indian Public to get Independence. We hope after defeat in 2014 Lok Sabha election that the Congress is another Pandey in that Pathway..
    Reply
  6. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    Now Mr Narendra Modi is the prime minister of India and as his party describe India was the world leader, he may try to recover its glory. Of course, everything didn't come from India. But most things did. Denying them doesn't change the truth. Satyameva Jayate.
    Reply
  7. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    The very word Navigation has its root in the Sanskrit word Navgath which means the same. The Loot of Bengal's wealth in the Battle of Plessey 1757 was used by the British to fund their Industrial Revolution in England.
    Reply
  8. A
    Aarti Khana
    Jun 7, 2014 at 8:28 am
    Three of the five major world religions were born in India - Hinduism, Buddhism and Sikhism. Navigation was invented in India. Indian merchant ships moved across continents from Africa to Far East even before the times of Christ.
    Reply
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