India-EU bilateral trade, investment pact in works

‘‘We will set up a joint study group this time. The idea is to explore the possibility of a bilateral agreement that encompasses investment and trade,’’ said a senior commerce department official. He added that an agreement similar to a compehensive economic coopeation agreement (Ceca) could well be on the horizon.

Industry leaders have demaded the two countries enter into specialised free trade agreement (FTA) in services, considering that Indian IT companies find it lucrative to cater to the West European markets from bases in countries that acceded to the EU bloc lately. (Over 20 per cent of India’s IT exports are to the EU at present).

The EU is Inda’s largest trading partner and the biggest source of FDI. During 2004, EU-India trade jumped to 33 billion euros, registering an increase of 17 per cent. Although, EU is India’s largest trading partner, India accounts for just 1.7 per cent of total EU trade.

In The Hague, the EU and India had begun the groundwork for a Joint Action Plan, which, sources said would be endorsed in New Delhi.