New Delhi: The European Union (EU) on Friday urged India to conclude a broad-based bilateral free trade pact but data protection issues remain one of the main stumbling blocks on the road to finalising the deal.

The EU stressed that New Delhi’s standards of data protection have to be compliant with European levels before India could be certified as data-secure.

In New Delhi at their 14th annual summit, India and the EU pledged closer cooperation in areas ranging from counter-terrorism—i.e. cutting flows of funds to terrorists and terrorist organisations—to maritime security and piracy as well as clean energy and climate change. There was also convergence on increasing cooperation in developing smart cities and upgrading urban infrastructure besides science and technology.

The European Investment Bank (EIB) announced funding for two projects.

The EIB said it would provide €500 million to the Bangalore Metro Rail Corp. Ltd for the purchase of train cars and the construction of metro stations—one of the largest EIB loans to India as well as “the largest-ever support to sustainable transport outside of Europe," an EIB statement said.

A second EIB statement said the lending institution had also agreed to a new partnership with the India-proposed International Solar Alliance “to mobilise finance to develop and deploy affordable solar energy in solar rich countries".

“The EIB also confirmed plans to provide a record €800 million for renewable energy investment across India," the second EIB statement said.

But the differences between the two sides came to the fore on issues of trade and investment.

Prime Minister Narendra Modi, in his comments, acknowledged the EU as India’s “largest trade partner for a long time" and as one of its “largest sources of foreign direct investment".

Though he referred to the EU and India as “the world’s largest democracies" who shared “the vision of a multi-polar, rules-based international order," he did not refer to the free trade pact under negotiation since 2007. The pact is known as the Bilateral Trade and Investment Agreement (BTIA).

However Donald Tusk, president of the European Council, in his remarks to reporters at the end of the summit level talks stressed that “free and fair trade agreements were not only economically important" for common citizens’ prosperity, “they strengthen and defend the rules-based international order and our way of life."

“Democracies of the world can be the ones to set ambitious global standards but only if we cooperate," Tusk said adding that he was confident India and the EU could come together for “this ambitious and strategic cause."

In his remarks, Jean-Claude Juncker, president of the European Commission, noted that India and the EU represent the “loudest voices for free and fair trade."

“With this in mind, I believe it is time for a free trade agreement between India and the EU.. today’s summit is an important step in the right direction and our chief negotiators will sit down for talks in the coming days to chart a way forward."

On India’s demand that it be declared a data-secure country as part of the BTIA, Juncker said he had stressed the need for both sides to agree to high standards of data protection. Indian software service providers have specialised in offering back office and information technology (IT) services to European companies. The jobs that go with this depend on the exchange of data, he said —referring to Indian companies accessing data from Europe as part of IT services rendered to European firms.

“If India’s standards of data protection are converging with that of the European Union, the European Union will be able to recognise adequacy of India’s goods. This is a precondition to exchange personal data surely and securely," he said—an allusion to Europe demanding a firm assurance from the Indian government that any data accessed by Indian firms would be secure and not exposed in public.

Negotiations on the India-EU free trade agreement started back in 2007, with 16 rounds of talks held since then. The last round was held in 2013, after which negotiations were suspended. Both sides have explored restarting negotiations after the Narendra Modi government assumed power in May 2014 but Brexit uncertainties and inflexibility on both sides have prevented resumption of formal talks.

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