Live Mint | 13 May 2021
India, EU set to resume free trade agreement talks soon, says official
by Elizabeth Roche
India and the European Union will soon start talks for a free trade agreement (FTA), a senior Indian government official said on Wednesday, adding that the resumption of the trade and investment talks with the bloc was an important outcome of last week’s summit.
“Pre-FTA discussions will start any time now. In the coming weeks, we will set the timeline and we will have discussions," Sandeep Chakravorty, joint secretary in charge of Europe West in the foreign ministry, said at a post-summit briefing. “The will on both sides is to conclude them (FTA talks) at the earliest," he said.
One of the key takeaways from the 8 May summit that saw Prime Minister Narendra Modi join leaders of the 27-member EU bloc virtually was the resumption of the FTA talks after a gap of eight years.
The talks, which first began in 2007, stalled after 16 rounds of discussions were held over six years. During the summit, the two sides agreed to resume dialogue on a trade pact and an investment accord besides on geographical indications.
Chakravorty said India had been pushing for the resumption of talks with New Delhi at one point saying that the success of the summit would be measured against “whether we resume the trade and investment negotiations or not".
He said discussions on resuming the FTA picked up steam post the 15th India-EU Summit in July last year after the two sides set up a high-level dialogue headed by Commerce Minister Piyush Goyal on the Indian side and Trade Commissioner Valdis Dombrovskis on the EU side.
Goyal “did the heavy lifting" from the Indian side “to see how we can agree to some of the preconditions that had been laid by the EU", he said.
“To be frank, it was not easy to convince the EU because they had experience of the past negotiations. And here I must give credit to the Portugal presidency. They also, I think, put a lot of effort into it. They saw that the resumption of the trade and investment negotiations will be a positive outcome of the Portugal presidency," Chakravorty said.
The resumption of the FTA talks with EU also needed to be seen in the context of India not joining the mega Regional Comprehensive Economic Partnership (RCEP) as well as New Delhi’s view that FTAs have not worked for India in the past, Chakravorty said.
The official was referring to the China-led free trade pact between the Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. It was agreed to in 2019 and finally signed last year. New Delhi was opposed to the RCEP as it was apprehensive of cheap Chinese goods coming into India through third countries. India has also said it would be relooking at FTAs it has signed previously as its imports were seen as outstripping exports.
In this context, India’s decision to resume FTA talks with EU was significant, Chakravorty said. He also pointed to the fact that India had anno-unced an Enhanced Trade Partnership with the UK.