Berlin: India and European Union (EU) will hold a crucial meeting on the proposed free trade agreement (FTA) on Monday in Brussels to iron out the impediments in concluding of the bilateral pact.
The meeting which is also seen as a last ditch effort to resolve the differences before India gets into the election mode where the manoeuvring of decisions regarding the pact will become difficult. The high-level meeting between commerce and industry minister Anand Sharma and EU trade commissioner Karl De Gucht in the EU headquarters will focus on narrowing down the differences, including hiking foreign direct investment (FDI) cap in insurance sector by India, duty cuts both in automobile as well as in wines and spirits sector.
Sharma will be accompanied by a team of high level official, including commerce secretary S.R. Rao, additional secretary Rajeev Kher, among others, an official said.
“There are several issues over which there are wide differences and both sides will try to resolve them amicably to make progress on the much-awaited bilateral trade and investment agreement (BTIA),” the official said.
The meeting also comes within days of India reaching out to Germany, a key member of the 27-nation European bloc, in a big way on the issue with Prime Minister Manmohan Singh seeking a “strong political thrust” from German Chancellor Angela Merkel on inking of the agreement.
However, Merkel stressed the need to address the concerns including those of the German auto industry ahead of inking of the BTIA. Both Germany and India has set a target of concluding the pact this year. India and the 27-nation bloc are negotiating the BTIA since June 2007 and have missed several deadlines to conclude the talks due to differences among the two sides on the level of opening up of the markets. Already 16 rounds of negotiations have been completed but still both the sides are engaged to bridge the gap in matters such as tax issues in automobiles, dairy products and movement of professionals across borders.
India is demanding for a data secure status from the EU. This has been preventing flow of outsourcing business to India and free flow of sensitive information to India such as patient information for tele-medicine.
The EU wants hike in the FDI limit in the insurance sector to 49% from the current 26%, the Bill for which is pending with Parliament.
In pharma, the EU has been pushing for rights to seize drugs transiting through its territory in case its custom authorities suspect intellectual property violation, a demand which India has refused to give.
The two-way trade stood at $91.3 billion in 2010-11.
India has already implemented comprehensive FTAs with countries such as Japan, Malaysia and South Korea.