EU intensifying efforts for negotiations on India FTA

EU intensifying efforts for negotiations on India FTA

The 28-nation bloc willing to be flexible in resolving contentious issues.

Amid slowdown in some of its key economies, the European Union (EU) is intensifying its efforts to reach out to India for concluding the negotiations on the proposed free trade agreement. EU officials dealing with the subject said that while they are looking at a ‘political push’ from India to kick-start the stalled negotiations, the 28-nation bloc is willing to be flexible in resolving the contentious issues.

“I think Prime Minister Narendra Modi is a man who wants to get things done. I think it is the word from the top that works in India. I think the word needs to come from the top,” Geoffrey Van Orden, chairman of the European parliament delegation for relations with India, said. The officials said that the EU commissioner is likely to request a meeting with commerce and industry minister Nirmala Sitharaman during the coming months to “work out the broader details for a pact which will be win-win for both the parties”.

“We are proposing a meeting at the earliest opportunity for broad reflection. Since 2013, negotiations have not taken place. The EU is ready to show flexibility on all major issues that have stalled the talks. A cooperation agreement was signed in 1994 between the two. We need to sit and update it,” the officials said. The agreement was signed to look into further development and diversification of trade and investment between both the parties.


The last round of talks, which started in June 2007, was held in May 2013. However not much breakthrough was achieved due to EU’s concerns in areas including high tariffs on cars and wines, insurance, banking, retail, legal services, geographical indication, and public procurement while India’s concerns were on services.


The two way trade between the EU and India stood at $101.53 billion in 2013-14. Export to the EU countries till April-December stood at $37.46 billion while imports stood at $36.78 billion.

India is seeking improved market access in the services sector, which contributes around 60 per cent to the GDP. It wants greater access in, what is called, Mode 1 that pertains to services like telecom, ITeS, and IT and Mode 4 which pertains to movement of skilled professionals like doctors and chartered accountants.

The EU wants further liberalisation of legal and accountancy services in India. “Goods and services tax, insurance law and land acquisition bill are litmus test for investors. If this isn’t managed, it can discourage foreign investors,” another EU official said adding that the ordinance for raising FDI limit in insurance sector to 49 per cent has failed to instill confidence in investors.

(The writer was in Brussels on an invitation from EU)