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‘India willing to go ahead with free trade pact with EU’

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Commerce and Ind Minister Nirmala Sitharaman

Free Press Journal | 11 September 2014

‘India willing to go ahead with free trade pact with EU’

By FPJ Bureau

Negotiations with Oz and New Zealand are not moving at a fast pace because they want huge concessions of dairy sector, which is a sensitive area for India, an official said. Similarly, with Canada, India has issues in services sector

New Delhi : India on Wednesday said it is willing to go in for a free trade agreement (FTA) with the European Union but wants the 27-member bloc to address the issues flagged by New Delhi.

“Nothing stops us from doing it but, of course, let him (the EU ambassador) also come back saying that they are interested…its not as if we are holding back…,” Commerce and Industry Minister Nirmala Sitharaman told here.

The EU’s main focus at present is on the the mega trade pact – Transatlantic Trade and Investment Partnership (TTIP).

The minister said the EU Ambassador had met her recently and the agreement came up for discussion. Launched in June 2007, negotiations between India and the EU for Broadbased Trade and Investment Agreement (BTIA) had hit a road block in May last year as both the sides failed to bridge substantial gaps on crucial issues. For the Indian side, among other issues, granting of data secure nation status to it by the EU is very crucial as it will have a bearing on Indian IT companies wanting market access there. India also wants liberalised visa norms for its professionals and greater market access in services and the pharmaceuticals sector. Besides demanding significant duty cuts in automobiles, the EU side is pressing for tax reduction in wines and spirits and dairy products and a strong intellectual property regime.

Commerce Secretary Rajeev Kher said that negotiations for the pact had advanced to a significant levels. “…if this agreement has to conclude, then the EU has to consider exposition thats what we have said,” Kher said. The total trade between India and EU was about USD 103 billion during 2013-14.

On industry apprehensions that FTAs are not benefiting India, he said these pacts will help increase competitiveness of Indian products. He admitted however that few sectors could have been impacted by these agreements.

“This is clearly made out that FTAs per se have not adversely affected manufacturing. Yes, some segments of manufacturing can be affected,” he said, adding that the recent FTA partners have utilised these pacts to the extent of only 3-28 per cent. He also said that at a time when the WTO is not delivering “then in order to find preferential markets you get into these FTAs”. India is part of the Regional Comprehensive Economic Partnership agreement but not the Trans-Pacific Partnership (TPP) and TTIP. Kher said: “…so clearly the choice is if you want to diversify and if you want to intensify preferential trading, we have to look into markets which are relatively less exposed and that is why we are proposing Latin America, Africa, CIS, South Asia, and West Asia. “These are the markets which we should utilise either through institutional mechanism such as PTAs and FTAs or through the sector base cooperation.”

In a press note, the Commerce Ministry said: “As part of our larger vision, a more focused direction would be given to the utilisation of FTAs and to establish new approaches to preferential trading with Latin America, CIS region and Africa.” Government will also strategise global trade engagements to conclude trade pacts, where negotiations are in various advance stages, such as with EU, Peru, Columbia, Common Market For Eastern and Southern Africa (COMESA), RCEP, MERCOSUR (a trading bloc in Latin America comprising Brazil, Argentina, Uruguay and Paraguay), Russia, China and the US, it said. Amidst concerns raised by industry on impact of FTAs on domestic manufacturing, the ministry is undertaking a comprehensive analysis of free trade agreements which India has implemented with its trading partners. India has implemented FTAs with countries like Japan, South Korea, Malaysia and ASEAN region. India is also negotiating similar pacts with countries, including Australia, New Zealand and Canada. Negotiations with Australia and New Zealand are not moving at a fast pace because they want huge concessions of dairy sector, which is a sensitive area for India, an official said.

 source: Free Press Journal