Narendra Modi, the new prime minister of India, may be favourably inclined to address key concerns of the European Union over the restricted access to Indian markets, according to a report in the Indian Express.
The EU and India began negotiations on a trade deal in 2007. The member states of the EU hope to break into the restricted Indian market of one billion people and the Indians looking for greater EU investment in its infrastructure and more technology transfer.
But as the Pakistani newspaper Dawn put it this week:
“It’s called a ‘strategic partnership’ but relations between India and Europe are largely underwhelming.”
Now a meeting on trade, development and economic issues will take place between the two sides on June 26. They will discuss EU trade demands, especially in relation to the Indian policy of restrictions on public procurement policy for EU companies. EU officials will also argue for a less “adversarial” tax regime.
According to the Indian Express, among the main objectives of the meeting is re-starting the bilateral trade and investment agreement and pushing them to a conclusion.
Indian officials are quoted as saying the EU had “disengaged” itself from the Broad-based Bilateral Trade and Investment Agreement (BTIA) talks for over six months as the previous UPA government was unable to meet their demands.
The talks were stuck “because India did not relent on the EU’s demand to eliminate or drastically reduce duties on auto (mostly luxury vehicles), auto-components and wines and spirits. EU also wanted greater access in India’s financial services market, besides high-level Geographical Indication protection for its items, including cheese and olive oil.”
José Manuel Barroso, president of the European Commission which has sole power to negotiate EU trade deals, made a point of mentioning the trade negotiations in a letter of congratulations he sent to President Modi following his election last month, saying: “We look forward to moving the European Union-India Strategic Partnership to new heights.”
“Today the European Union is India’s largest trading partner and major foreign direct-investment provider. Both trade and investment can be further enhanced through an early conclusion of an ambitious Free Trade Agreement/Broad-based Trade and Investment Agreement.”