NEW DELHI: European Union’s Ambassador to New Delhi, Joao Cravinho, last week expressed keenness to pursue the India-EU Free Trade Agreement talks. The desire is mutual. Despite the vigorous pace that the Narendra Modi government has marked in the matter of foreign relations in general, this process has remained in suspended animation for two years now.
Minister for Commerce and Industry Nirmala Sitharaman had assured the Ambassador in March of India’s willingness to resume talks. As Mr. Cravinho mentioned, the meeting of the OECD countries scheduled for June offers an opportunity for both sides to draw up a road map.
The EU identified India as a ‘strategic partner’ in 2004. A Joint Action Plan was signed in 2005 and negotiations on the proposed Broad-based Trade and Investment Agreement (BTIA) were launched in June 2007. Eight years down the line, some contentious issues still remain. In the backdrop of Prime Minister Modi’s visit to France and Germany in April came the cancellation of the India-EU summit, apparently for “logistical” reasons. Issues such as the EU ban on import of mangoes from India announced in May 2014, and the legal proceedings in India involving the Italian Marines, are also factors that have left the relationship strained.
The EU is one of India’s largest trading partners and a major source of FDI. The value of EU-India trade grew from €28.6 billion in 2003 to €72.5 billion in 2014, while trade in commercial services rose from €5.2 billion in 2002 to €23.7 billion in 2013. India has concluded agreements with ASEAN, Japan, Singapore and Korea. With the EU the scale of the deal is more ambitious, and consequently the disagreements. For instance, the EU is unhappy with India’s protectionism in the automobile sector, and wants steep cuts in duties, and tariff cuts in things such as wine, spirits and dairy products.
