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New Delhi: India on Thursday proposed to adopt an incremental approach to expedite negotiations for the long-pending trade accord with the European Union.

Such an approach would mean “what may not happen now can be included later," trade minister Anand Sharma said after a meeting with German economy and technology minister Philipp Roesler.

Analysts said what Sharma means is that the two sides should move ahead with the negotiations capturing the achievable targets and keeping the contentious issues off the table for now.

Arpita Mukherjee, professor at the Indian Council for Research on International Economic Relations said Sharma may have meant that India cannot agree on all the demands from the EU at this time and will make measures binding under the trade agreement as India progressively liberalizes further.

“What we have on the table from both the sides, it is fairly robust. We will now leave it to the negotiators to bring it to its early conclusion," Sharma said.

Biswajit Dhar, director general at Research and Information System for Developing Countries, said the message that India is trying to send is that the EU should understand India’s sensitivities and both sides should try to achieve the best they can under the current circumstances.

Talks on the bilateral trade and investment agreement between the two started in 2007. The two sides have missed at least four deadlines to complete negotiations. In September, India further liberalized foreign investment in retail, aviation and broadcasting sectors, areas where the EU is interested in.

Swedish furniture retailer Ikea has applied for government clearance to open retail stores in India with a commitment to invest €1.5 billion (around 10,455 crore today). Supermarket chains such as Britain’s Tesco Plc. and Carrefour SA of France are also interested in opening retail stores in India.

Apart from the reform measures already announced, the EU wants India to open up its postal and legal sectors, and further liberalize the pension, insurance and banking sectors. India has made it clear it cannot promise anything that requires legislative approval. The EU also wants India to approve the government procurement Bill pending before Parliament to make for greater transparency in state purchases. India also wants greater flexibility in the movement of skilled professionals. Since the EU does not have a common working visa system, it restricts the free movement of an Indian professional across nations of the grouping.

While the current Schengen visa system allows free movement of people within signatory countries in Europe, it is essentially a tourist visa meant for short stays and does not allow visa holders to live permanently or work in Europe.

Europe is currently debating the adoption of a common immigration policy to provide single working visas for non-Europeans.

India is also keen on EU members removing restrictions on investments by Indian companies. Some EU countries such as Hungary and Romania prohibit acquisitions by Indian companies. India has also been demanding that the EU declare the country data-safe, a move that will help information technology and back-office services companies.

Roesler in his meeting with Sharma underlined the concerns of German’s pharmaceutical industry in the wake of granting of compulsory licence of a cancer medicine to Natco Pharma Ltd recently. “Sharma assured the visiting minister that India’s action was well within the parameters of TRIPS (trade-related aspects of intellectual property rights) commitments and the flexibility of compulsory licensing has been used more than 50 times by the developed countries while this was the first time India resorted to this," a commerce ministry statement said.

Sharma has said India and Germany will achieve the trade target of €20 billion this year. The trade between the two countries stood at $23.56 billion (around 1.2 trillion today) in 2011.

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