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European Union not keen to relax FTA visa curbs

Times of India

European Union not keen to relax FTA visa curbs

By Sidhartha, TNN

15 August 2011

NEW DELHI: The European Union is pushing for more foreign investment in a slew of sectors-banking, insurance, legal, accounting, postal, maritime and security services-but is unwilling to allow a bigger number of Indian professionals to work in the 27-member union. The EU is also reluctant in permitting services trade through electronic channels.

Sources told TOI that the pace of negotiations has slowed down in recent months and is well past the summer deadline that negotiators from both sides were working on. And, it isn’t India’s unwillingness to lower duties on imported wines and spirits and automobiles that is holding back the India-European Union Free Trade Agreement.

In any case, EU has so far not shown any flexibility in offering a single set of rules for trade in services across all member countries, a key demand from Indian stakeholders, who are complaining of lack of harmonization as domestic regulatory regimes vary among the member-states "We have told European negotiators that a balanced deal for India rests on not only an attractive package for goods trade, in which agricultural market access is critical, but also services market access, especially cross-border and movement of natural persons," said a person familiar with the talks.

The Indian government’s ability to relax the rules for financial, maritime or postal services is also dependent on the local legislation. In certain areas, legal amendments would be required and some of the ministries are not keen on allowing more play to foreign investors, especially from one market, said a source. For instance, the legal fraternity is unwilling to allow foreign firms while chartered accountants have linked permission to foreign firms in India to reciprocity in overseas markets. They said there had been some progress on goods trade as EU had agreed to eliminate tariffs on more products. While negotiations on industrial goods are still under way, Indian officials say mere reduction in tariffs by EU will not lead to increased trade unless non-tariff barriers (NTBs) are also eliminated. This is another area where the European negotiators are engaged in discussions.

India and EU have been negotiating the proposed Bilateral Trade & Investment Agreement for nearly four years now. Though there has been pressure on New Delhi to offer a special dispensation on intellectual property rights and also link talks to labour standards, environment and animal welfare, the government has so far resisted the move.