India has proposed to the European Union (EU) that it is ready for the early harvest scheme of their long-pending bilateral trade and investment treaty (BTIA), delayed further by Brexit.

A commerce ministry official, speaking on condition of anonymity, said the early harvest agreement scheme, which will be a subset of BTIA, could consist of immediate deliverables, components of which will be decided once the EU agrees to the proposal.

“We have made all efforts with the EU to conclude the ongoing negotiations. We have now offered to the EU that we will be happy to do an early harvest scheme of BTIA and take care of their concerns about the bilateral investment treaty (BIT). We can move ahead and do the full-fledged pact later. This is intended to break the current logjam. We are waiting for their response," the official said.

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.

The official said the proposed early harvest scheme can include discussions on a BIT which is a concern area for the EU. The EU had expressed its concerns about India’s plan to end its investment treaty with the EU and renegotiate it on the basis of the model BIT cleared by the cabinet in December last year. Mint reported on 26 July that the finance ministry wants to delink the investment chapter from the ongoing BTIA talks and negotiate BITs with individual EU member countries. However, the commerce ministry official said that proposal now stands withdrawn.

A query sent to the EU mission in India was not answered till press time. However, in reply to a questionnaire in July, Cesare Onestini, acting head of an EU delegation to India, said though both sides are committed to resuming formal talks and concluding the pact as soon as possible, “it is not possible to announce dates for the resumption (of negotiations) yet".

Asked whether the proposed early harvest will have a services components which is of India’s interest, the commerce ministry official quoted earlier said it is a matter of negotiation. “Once the EU says it is ready for an early harvest, then both sides can tell what they want to keep in the agreement. We will factor in the changes that have happened since Brexit. We know the tariff lines of interest to Britain. That will not be part of the early harvest scheme," the official added.

Professor Gulshan Sachdeva, chairperson of the Centre for European Studies at the Jawaharlal Nehru University said though this is a good move by India to break the deadlock, he doubts the EU will be very receptive to the idea. “Through this proposal, India is showing some kind of seriousness. But the problem is EU is preoccupied with what kind of arrangement they will have with Britain post Brexit (Britain’s decision to leave exit the EU). In such uncertain times, a new trade deal is unlikely to materialize. The EU’s position so far has been also that they want a comprehensive agreement with India because they have to consult so many countries," Sachdeva said.

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