Economic Times | 18 Oct, 2013
EU should allow easier entry for Indian professionals to support free trade pact: Icrier
By Dilasha Seth, ET Bureau
NEW DELHI: The European Union should allow easier entry and movement of Indian professionals in order to generate support for the free trade pact between the two that’s been under negotiation for the last six years, Indian think tank Icrier said in a study commissioned by the 27-country grouping.
The report was issued ahead of an EU delegation meeting commerce and industry minister Anand Sharma on October 29, when the free trade agreement is likely to be discussed.
India has been demanding data secure status and easier movement of professionals, whereas the EU wants lower tariffs across a wide range of sectors such as textiles, automobiles, auto components, chemicals, agro-processing, wines and spirits, among others. Talks on a treaty began in 2007 and so far there have been 16 rounds of negotiations but the two sides have been unable to bridge differences. The proposed agreement is India’s first bilateral treaty with a large trading partner and one including services as well.
For the EU, this would be its first comprehensive agreement with a large emerging economy.
The EU has shown stiff resistance against granting India data secure status on account of what’s seen as India’s lax norms in terms of information confidentiality.
The EU can work with India to make the necessary changes in regulations so that India becomes compliant with safe harbour nation requirements for data protection, the Icrier report pointed out. "Alternatively, the EU can appoint a body to identify data secure companies in India," said Arpita Mukherjee, author of the report, India as a Trading Partner: Issues in India-EU. India is trying to improve its laws to meet EU conditions.
"Significant amendments were carried out in the IT Act 2008, to protect customer confidentiality, and we do believe that we have a robust legal regime. However, since they have made a suggestion, department of IT and electronics has nominated some people from industry to sit with their counterparts and look at the areas of concern for EU," a senior commerce department official told ET.
India has also been strongly demanding so-called Mode 4, which will allow Indian professionals to work in EU member states, a segment in which India sets to gain the maximum. However, after the economic crisis and unemployment in member states, EU has added a safeguard clause that imposes restrictions on the movement of professionals after a particular limit, which does not suit India’s IT industry.
Mukherjee suggested that the EU can design a Mode 4 offer to suit India’s demands and follow its definition of Mode 4 with respect to duration of stay and coverage. "The EU can take steps to streamline the work permit and visa regime across member states by implementing directives such as the proposed directive on conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer," the report suggested.
In exchange, the Icrier study said India must open its auto and wine markets to the EU by lowering import duty.