India Free Trade Agreement: European Union Expects Both Sides To Move With Caution

Talks on the free trade agreement between the EU and India started in 2007 but there has been little progress since then.

Even as the European Union (EU) is preparing its reply to a letter written by India’s commerce and industry minister, Nirmala Sitharaman asking for a meeting of chief negotiators to resume dialogue on the free trade agreement, the EU feels that this time around the two sides will move with caution.

“You don’t negotiate trade agreements without caution. Caution goes hand in hand with ambition. So you have to be able to deliver in the end a deal that is both ambitious and in the interest of both the sides,” said Daniel Rosaro, spokesperson Trade, Directorate-General Communication-EU.

Last year in August, India cancelled a meeting with the EU chief trade negotiator in protest against an import ban on 700 of its generic drugs clinically tested by GVK Biosciences for alleged manipulation of clinical trials. According to Rosaro, India should not have cancelled the meeting with the EU chief negotiator as the import ban was not linked to the free trade agreement. “For us this (cancellation of meeting) was a step that was not really justified at that time and we have explained it why. The GVK issue had nothing to do with the negotiation of a trade agreement,” said Rosaro.

When asked if the EU is focussing more on Transatlantic Trade and Investment Partnership (TTIP) than negotiating free trade agreement with India, Rosaro said, “TTIP is a very demanding process and has brought new public interest in trade policy, but it is one of the many processes where the EU is involved in terms of trade policy we have a broad ambitious global trade agenda in which India comes as one priority.” Shada Islam, director of policy at Friends of Europe, a think-tank  that aims to stimulate new thinking on global and European issues said while India needs to engage with the EU at a higher level and focus on its relationship with Europe, the EU too has to keep up the momentum in its relationship with India.

In November 2015,  Prime Minister Narendra Modi and Donald Tusk, president of the European Council, met in Turkey on the sidelines of a G-20 meet and agreed to hold a stocktaking meeting before resuming formal talks. In March, during the EU- India summit the two sides have now developed a strategic partnership for joint cooperation in many areas under the title EU-India Agenda for Action 2020. “The fact that EU and India have identified quite a few areas of synergies whether it’s smart cities or clean India is quite interesting. I hope this will open up ways for businesses to get involved. We think that there is a lot of potential in  Narendra Modi’s drive for modernisation of India. But we need to see how this can work out in reality, “ said Islam. “What we are also watching very closely is also how India works within the G-20 because that’s for us is one of the new global governance tools,” Islam said.