India European Union Free Trade Agreement

However, this is a misleading argument. At present, there is no way for India to take China`s place in the EU`s network of economic relations in terms of trade and investment volume. For the latter, the value of the EU`s foreign direct investment in China in 2019 was 2.6 times higher than that of its foreign direct investment in India (€198.7 billion and €75.8 billion, respectively). Chinese inflows to the EU have also been larger than Indian FDI in recent years. While a 2020 report by Rhodium Group-MERICS showed that Chinese foreign direct investment in Europe fell sharply during the 2017-2019 period, this does not necessarily mean that Indian companies are comparable rivals when it comes to their ability to invest in the EU. In addition, New Delhi and the EU are again negotiating a trade deal (which most likely focuses on reducing tariffs on trade in goods) rather than an agreement to liberalise bilateral investment, although the EU signals its willingness to start negotiations on this front as well. Progress has been made in resuming negotiations on the India-EU free trade agreement, and formal talks will begin this month, Foreign Minister S Jaishankar said on Wednesday. “Both sides originally hoped to start formal free trade negotiations by the end of 2021, but that doesn`t seem to be happening. There are far too many loose points that need to be tied before conversations can begin. The EU has been in contact with the Ministry of Trade and Industry, but the gaps appear to be significant,” a source said.

India hopes to restart negotiations on a free trade agreement with the UK after Brexit in January. Trade Minister Piyush Goyal said New Delhi hopes to conclude a free trade agreement with the UAE in early 2022. Earlier this year, India and the European Union decided to resume stalled negotiations on a comprehensive trade and investment agreement. Meanwhile, India has also begun talks with Canada on a free trade agreement and plans to conclude one with the Gulf Cooperation Council, a six-member group made up of Bahrain, Qatar, Saudi Arabia, Kuwait, Oman and the United Arab Emirates. In a virtual interaction hosted last week by the Indian Council for Trade Promotion, Arpita Mukherjee, a professor at ICRIER specializing in trade and investment, stressed the need for innovative solutions to break possible deadlocks on critical issues. In the case of alcohol, for example, Mukherjee proposed a threshold price for these products with a view to tariff liberalization, as Japan did for Australian wines under RCEP. The EU is India`s largest trading partner with 12.5% of India`s total trade between 2015 and 2016, ahead of China (10.8%) and the US (9.3%). India is the EU`s 9th largest trading partner, accounting for 2.4% of total EU trade.

Bilateral trade (goods and services) reached €115 billion in 2017[3] EU exports to India increased from €24.2 billion in 2006 to €45.7 billion in 2018. India`s exports to the EU also increased steadily, from €22.6 billion in 2006 to €45.82 billion in 2018[2], with the most important sectors being mechanical engineering, pharmaceuticals, precious stones and jewellery, other manufactured goods and chemicals. Trade in services also tripled between 2005 and 2016, reaching €28.9 billion. India is one of the few countries in the world to have a surplus in services trade with the EU. Investment portfolios from Europe to India reached €51.2 billion in 2015. [4] This may soon change. India and Australia are set to sign an “early harvest” agreement before the end of the month, paving the way for a broader free trade agreement (FTA) they plan to sign next year. Former Prime Minister Tony Abbott, now the Australian government`s trade representative, has hinted that India`s tariffs on his country`s wines could be lowered as part of the interim pact. India and the EU have been working since 2007 to develop a broad-based Trade and Investment Agreement (BTIA), but India`s trading system and regulatory environment remain relatively restrictive. Seven rounds of negotiations have been concluded without a free trade agreement being concluded[4][12] Negotiations on a bilateral trade and investment agreement between the EU and India have stalled after the failure to resolve disputes on issues such as the level of foreign direct investment and market access, generic production, greenhouse gas emissions, civil nuclear energy, agricultural subsidies, financial sector regulation and guarantees.

Cooperation on tax evasion, foreign funding of NGOs in India, trade controls, restrictions on technology transfer and cooperation on embargoes (Russia). [13] At present, India`s trading system and regulatory environment remain relatively restrictive. Technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, deviations from international standards and agreements, and discrimination based on Indian legislative or administrative measures affect a wide range of sectors, including goods, services, investment and government procurement. India and the EU announced in May the resumption of negotiations on a free trade agreement. The EU continues its cooperation with India to ensure that such an agreement makes economic sense, allows both sides to open up genuine new markets in all sectors, includes a strong rules-based track and includes a comprehensive chapter on trade and sustainable development, in particular: to address social and environmental impacts. In the meantime, the EU is ready to consider opening negotiations on a stand-alone investment protection agreement, which would increase legal certainty for investors on both sides. Bilateral, regional and global issues were on the agenda of the summit. Leaders underlined the importance of the EU-India strategic partnership.

They sought to strengthen cooperation in the fields of security, in particular the fight against terrorism, cybersecurity and the fight against piracy, as well as trade, energy, research and innovation. [24] At the EU-India Summit held in Marseille on 29 September 2008, the EU and India agreed to intensify their cooperation in the fields of nuclear energy and environmental protection and to deepen their strategic partnership. France`s President Nicolas Sarkozy, the EU`s rotating president, said at a joint press conference at the summit: “The EU welcomes India as a major country to participate in the development of nuclear energy, adding that this clean energy will help the world cope with global climate change.” Sarkozy also said the EU and Indian Prime Minister Manmohan had pledged to speed up negotiations on a free trade agreement and planned to conclude the agreement by 2009. [21] “We also agreed to conclude an investment agreement and an agreement on geographical indicators at an early stage. The connectivity partnership between India and the EU is also important because of its bilateral impact, quality connotations and opportunities for third countries,” Jaishankar said. Relations between the Republic of India and the European Union are currently governed by the 1994 EU-India Cooperation Agreement. The EU is an important trading partner for India, and both sides have been working to negotiate a free trade agreement since 2007. [1] Bilateral trade between India and the EU (excluding trade in services) amounted to USD 104.3 billion in FY2018/19. [2] One of the EU`s main objectives in its trade relations with India is to work towards a sound, transparent, open, non-discriminatory and predictable regulatory and trading environment for European companies trading or investing with India, including the protection of their investments and intellectual property.

The aim is to help unlock the untapped potential of mutual trade between the EU and India. The EU is India`s third-largest trading partner, and in 2020, after China and the US, recorded trade in goods of €62.8 billion, or 11.1% of India`s total trade, according to EU figures. Government officials are also reviewing the EU`s recent investment agreement with China and its free trade agreement with Vietnam for meaningful negotiations. Preparatory work for the next round of negotiations is in full swing, a senior official said. Since withdrawing from the Beijing-dominated RCEP trade talks in November 2019, India has been trying to speed up negotiations with major economies. But he made it clear that such an agreement must be “fair” and “balanced.” France, Germany and the UK together account for the largest share of trade between the EU and India. [5] But the data shows that avoiding free trade agreements has not necessarily made Indian manufacturers more competitive. .

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