No schedule yet to restart negotiations on India-EU free trade pact: EU official

The 28-member European Union (EU) is “encouraged” by the political momentum the long-discussed India-EU free trade agreement (FTA) gained at the summit held between the two in Brussels at the end of March, but both sides have not been able to fix a schedule to restart negotiations as yet, an EU official said.Both sides have “outstanding issues” to sort out and “the European Commission offered India on several occasions and in different formats to create an adequate forum to discuss outstanding issues...to enable the process to move forward,” Daniel Rosario, a spokesman for the EU trade department, told a group of visiting Indian journalists on Monday.The last round of talks on India-EU FTA was held in 2013 and the discussions have remained deadlocked on issues such as tariffs on automobiles and wines and spirits, Rosario said.In the auto sector, EU is unhappy given that its exporters have to face Indian import duties of up to 100% on cars and car parts. And in the case of wines and spirits, European exporters face tariffs as high as up to 150%, Rosario said.He said the EU had put forward several proposals in 2013 to break the deadlock.“We suggested long transitional periods for their elimination or going as far as accepting asymmetric elimination of these duties in favour of India” in the case of automobiles, he said. In the case of wines and spirits, “the proposal made in 2013 was for a gradual if not complete elimination of these duties and taking into account the Indian sensitivities”, he said.“We clearly identified the areas where we expect India to make some movement and we offered some fora to go into some specific discussions to allow for the general discussion to move ahead and for the time being, this has not happened,” he added.When asked if the EU would agree to re-open negotiations from the start, Rosario said the EU could not “ignore all the work that has been done so far”.Despite the many contentious issues, “we are encouraged to see that in the last (India-EU) summit at the end of March, both sides agreed to re-engage in this process to give it the necessary momentum”, Rosario said, referring to the 30 March India-EU summit in Brussels. India was represented by Prime Minister Narendra Modi and the EU side was represented by Donald Tusk, president of the European Council and Jean-Claude Juncker, president of the European Commission.But Rosario did not seem to have an answer when asked when the talks will get going again.According to analysts, the trade pact could serve as an “anchor” for bilateral relations, besides proving to European businesses that “India is open for businesses”.The March India-EU summit was the first in four years and followed the EU’s refusal last year to confirm the dates of a proposed visit by Modi amid a diplomatic row over the slow progress in India of the trial of two Italian marines accused of killing two Indian fishermen in 2012.Talks on the Bilateral Trade and Investment Agreement—the official title of the free trade pact—started in 2007 but progress has been tardy and marked by flip-flops. India cancelled a meeting with the EU chief trade negotiator in August last year in protest against an import ban on 700 of its generic drugs clinically tested by GVK Biosciences for alleged manipulation of clinical trials.“The GVK issue, it’s a decision for us that has nothing to do with the negotiations of a trade agreement, it never had a link,” Rosario said.Later, during a meeting between Modi and Tusk in the Turkish city of Antalya in November on the margins of a G-20 meet, both sides agreed to hold a stock taking meeting between the chief negotiators before resuming formal talks. The stock-taking talks, including a meeting between Indian commerce secretary Rita Teaotia and EU Trade Commissioner Cecilia Malmström in Brussels on 22 February, however, did not produce any results.The impression in New Delhi seems to be that with the EU involved in talks with the US on the Transatlantic Trade and Investment Partnership, it is not focused on trade talks with Asia’s third largest economy. Also occupying European mind space is the British referendum, to be held on 23 June, on whether the country should remain in the EU.“There was a long discussion on the trade agreement during the India-EU summit and we have conveyed to them (EU) that we are committed to the agreement,” said a person on the Indian side who is familiar with the developments.On India’s part, disputed issues in the trade talks include the so-called Mode 4, a provision of the 1995 General Agreement on Trade in Services, which seeks to facilitate the movement of professionals from one country to another.According to Shada Islam, director at the Policy Friends of Europe think tank based in Brussels, India-EU ties seemed to be a work in progress with India focused on consolidating ties with countries like the US.“The India-EU relationship is not as vibrant as the EU-China partnership,” she said, adding that the 30 March summit “seemed to be the beginning of a new understanding with misconceptions on their way out”.“At the moment, we (India and the EU) don’t have a strong anchor for our relations and the trade agreement could serve as that anchor,” she said.Total bilateral trade between India and the EU, which is India’s largest trading partner, was €78 billion in 2015, according to EU figures.The EU is one of the largest foreign direct investors in India with investments of €38.5 billion since 2000. 

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.

Time to move ‘beyond trade’ in EU-India relations

INDIAN Prime Minister Narendra Modi’s visit to Brussels for the EU-India summit on March 30 is good news.

The EU and India have much to discuss. There are hopes that Modi will use the long-delayed meeting — India and the EU have not met for summit level talks for four years — to open a new, more dynamic and more adventurous chapter in EU-India relations.

As John Lennon sang to Yoko Ono so many moons ago, almost 12 years after the EU and India vowed to become strategic partners — but then allowed their relationship to stumble and falter — it’s just like starting over.

Or at least it could be. If they are to reboot ties, India and the EU need a new conversation, a new focus on shared interests as well as new goals and ambitions.

Above all, they need to take a fresh look at each other, replacing tired misperceptions and clichés with a different, more up-to-date outlook.

India, with a growth rate of 7.5 per cent according to the World Bank, now has a more dynamic economy than China. The EU for all its current malaise has an interest in exporting and investment more in India and has the technology India needs for its modernisation drive.

As an increasingly influential regional and global power, India needs to have a more serious conversation with the EU on refugees, peace and security in Asia, Africa and the Middle East. Terrorism and threat from the militant Islamic State group are also issues of common concern.

Opening a new chapter means moving to a “beyond trade” agenda. Realistically, however, the summit’s focus will inevitably be on the Bilateral Trade and Investment Agreement (BTIA) or free trade agreement that Brussels and Delhi have been negotiating since 2007 with little success.

Negotiations on the deal stalled over a plethora of issues in 2013. If some of the key blockages can be removed in time by trade officials, the March 30 summit could mark the re-launch of the BTIA negotiations.

Such a scenario is certainly desirable. Trade and business are the glue that bind Europe to India and to other Asian states. Increased trade and investment flows will generate growth and jobs in both Europe and India. And resolving the trade stalemate will inject fresh momentum into the overall EU-India relationship.

But Brussels and Delhi need to be more ambitious. As illustrated by Modi’s high-profile visits to Britain, France and Germany, India has so far favoured its bilateral ties with national European governments over contacts with the EU. Meanwhile, Europe has spent more time and energy on building a strategy for China than on constructing a stronger relationship with India.

India’s new economic programme opens up fresh avenues for increased EU-India synergies which go beyond the two sides’ traditional interaction. This could include cooperation in areas where both sides have a strong economic interest such as infrastructure investments, sustainable urbanisation, renewable energy, innovation and synergies between “Digital India” and the EU’s agenda for a Digital Single Market.

The focus should now be on hammering out a more practical, pragmatic and operational agenda which seeks to find as much common ground as possible between Modi’s aspirational programmes and the EU’s initiatives to boost growth and jobs.

The EU is well-placed to share its experience in building a single market, economic reform and modernisation, cutting back over-regulation and improving the business environment.

A new EU-India action plan should be short, snappy and action-oriented, rather than the long “wish list” which the EU traditionally draws up with and for its partners.

Still, trade matters and it is important that the BTIA negotiations are re-opened and a deal is finally done.

The talks are like an obstacle race, however, with new problems emerging at every twist and turn. The latest bone of contention is over EU demands that India substantially bring down the “high” duties on automobiles as a pre-condition for resumption of the FTA negotiations. India’s import duty on cars range from 60-120pc as against the EU’s 10pc.

But the industry body for automobiles — Society of Indian Automobile Manufacturers (SIAM) — has asked the commerce ministry not to “buckle under pressure” from the EU, adding that this could ultimately hurt the government’s ‘Make In India’ initiative.

India is unhappy about restrictions on temporary movement of skilled professionals to the EU, especially the recent move by the United Kingdom to hike visa fees for skilled professionals as well as increase minimum salary threshold for intra-company transfers. India is also seeking data security status which it says is crucial for India’s IT sector to do more business with EU firms.

The EU, meanwhile, also wants lower Indian duties on wines and spirits and dairy products and a strong intellectual property regime. The value of EU-India trade grew from 28.6 billion euros in 2003 to 72.5bn euros in 2014 while EU investment stock in India was 34.7bn euros in 2013 and trade in commercial services quadrupled in the past decade, increasing from 5.2bn euros in 2002 to 23.7bn euros in 2013.

While such horse-trading is important and Modi and his EU counterparts must give the trade negotiations a much-needed push, the success of the summit will also hinge on a political agreement between Delhi and Brussels to start over.

View From Abroad: Europe, India and Modi — could be starting over (Originally published 20/06/2015 at dawn.com)

It has taken one year, but Indian Prime Minister Narendra Modi has finally signalled an interest in reviving ties with the European Union. And the EU is ready to reciprocate, albeit cautiously.India has in fact long been the big gap in the EU’s outreach to Asia. While India and the EU declared that they were strategic partners some years ago, the relationship has never really taken off.Indians complained the EU was distracted by problems at home and its focus on China. Europeans said India was too mesmerised by the US to pay attention to Europe. Contacts between the two sides were desultory, slow-moving and lacklustre.Finally, after a year-long wait, it looks like this could change. Whether it is his “Make in India” campaign or plans for “Digital India” and “smart cities”, Modi knows he needs European know-how and money. Europe, for its part, is eager to be involved in the massive overhaul of the Indian economic system that the prime minister is promising.Modi’s warm embrace of foreign partners could soon therefore also extend to the EU and not just national European governments. To make the Delhi-Brussels rapprochement sustainable, action is required in some important areas.First, after a year of little or no high-level contact, Delhi and Brussels must resume negotiations on the much delayed Bilateral Trade and Investment Agreement (BTIA), a comprehensive deal covering all areas in goods, services and public procurement in both markets. Once signed, the agreement could act as an important launching pad for increased European investments in India.Second, India’s new economic programme opens up fresh avenues for increased EU-India alliance which go beyond the two sides’ traditional interaction. This could include cooperation in areas where both sides have a strong economic interest such as infrastructure investments, sustainable urbanisation, innovation and synergies between “Digital India” and the EU’s agenda for a Digital Single Market.Third and most importantly, there are hopes that EU and Indian leaders could meet for summit talks, possibly in November this year to coincide with the G20 summit in Antalya, Turkey. With no bilateral summit held over the last three years — the last such gathering was in February 2012 in Delhi — the EU-India relationship is in desperate need of renewed political direction to give it a new lease of life.Both sides agree that EU-India relations need to be broadened to include a “beyond-trade” agenda — and that Modi’s wide-ranging modernisation programme offers ample opportunities for such new synergies. Realistically, however, a quick relaunch of the stalled BTIA negotiations is required to get the relationship back on a constructive track and for discussions to begin in new areas.This may now happen. EU Trade Commissioner Cecilia Malmström and Indian Commerce Minister Nirmala Sitharaman, who met on the margins of an OECD meeting in Paris on June 4, have agreed to restart the BTIA talks as soon as possible. Contacts are expected to resume soon, leading to cautious hopes that the deal — eight years in the making — will finally be clinched early next year.The EU has made clear that it is targeting the emerging well-off Indian middle class for enhanced market access in automobiles, wines and spirits, and cheese. Brussels is also calling for reform in Indian laws on intellectual property rights, trade and environment, trade and labour, and wants liberal access in insurance, banking and retail trade. India, for its part, is insisting on more labour mobility, professional work visas and recognition as a data-secure country to attract more European investments in its high-tech sector.With two-way trade estimated at around €72.5 billion in 2014 while the EU’s investment stock in India was €34.7 billion in 2013, there is certainly ample room for improvement. But agreement on BTIA will require that both sides summon up the political will to look beyond the array of technical issues to the deeper strategic importance of their relations.In order to get India and the EU talking to each other on these and other equally interesting topics, Modi’s can-do spirit needs to filter down to different, less adventurous echelons of the Indian bureaucracy. The European External Action Service, meanwhile, must work in tandem with the European Commission’s trade and other departments to hammer out a fresh EU-India agenda for action which looks at new areas and interests. Such an action plan should be short, snappy and action-oriented, rather than the long wish list which the EU traditionally draws up with and for its partners. Hopefully, Such a pithy document could then be approved at the EU-India summit later this year.Above all, both sides must take a fresh look at each other. European member states have already recognised the importance of India, both as a regional actor and an influential global player. It is time the EU institutions shed their reservations and engaged with India as an increasingly powerful 21st century partner.Equally, India should recognise that while relations with national European governments are important, the EU also has much to offer. It would be a pity if the full potential of EU-India ties were to remain untapped and unexplored for another long period.

View from Abroad: I wrote this column — despite being a woman (Originally published 13/06/2015 at dawn.com)

Yes, let’s make fun of Indian Prime Minister Narendra Modi’s sexist praise of his Bangladeshi counterpart, Sheikh Hasina, for being tough on terror “despite being a woman”. Social media in India and the world over has had a field day with Modi’s comment. I’ve laughed and tweeted along with everyone else.Imagine: the leader of the world’s largest democracy — and one which had a powerful female prime minister — making such an old-fashioned, disparaging remark about women. Outrageous. Unacceptable. Shocking. Offensive. Indian men are still stuck in a time warp.Really? Once the laughter stops, let’s take a sober look at the sad reality of women’s role, status and influence in the 21st century. And let’s also recognise that there is no dearth of men — and women — who still believe that women should be neither seen, nor heard. And that those of us who do manage to live “normal” lives, sometimes even becoming prime ministers, parliamentarians, business leaders, judges, doctors, teachers, journalists and so on… do so “despite being a woman”.Take a look: Modi trolled for lauding Hasina's courage in fighting terror 'despite being a woman'The data on lack of progress on women’s rights is daunting. Too many statistics point to the hard struggle still going on to end gender discrimination in government, business, schools and at home. Women make up half the world’s population and yet represent a staggering 70% of the world’s poor. Although some changes have been made, the struggle for women’s development and empowerment continues to face many obstacles due to government neglect, discrimination, family traditions and actions by religious authorities.The good news is that achieving gender equality and empowering all women and girls is recognised as an important priority in the post-2015 development agenda. But how committed are governments to giving priority attention to women and girls in their national development plans? Even more importantly, how ready are societies to accept women as full participants?In the same week that Modi got blasted for his comments, Tim Hunt, an English biochemist who is also a Nobel laureate, told the World Conference of Science Journalists in Seoul, South Korea, that he believed scientists should work in gender-segregated labs.“Let me tell you about my trouble with girls … three things happen when they are in the lab … You fall in love with them, they fall in love with you and when you criticise them, they cry,” Hunt intoned. Oh dear.Hunt’s angry critics have warned that his comments are a “disaster for the advancement of women”. And of course, female scientists are outraged. As it is, not many girls are opting to become scientists.If only Modi and Hunt were alone in believing women aren’t really strong and stoic enough to play hard ball. As the two men have shown, rubbishing women is probably the one sentiment/prejudice that unites many men, rich or poor, educated or illiterate, living in an industrialised or a developing country.It’s a common strand in the belief and discourse of Christian conservatives and their Muslim and Jewish counterparts. Veil them, cover their bodies and keep them home is the mantra of religious zealots of all faiths. And that includes the self-styled Islamic State of course.Sadly, women are as bad as men in believing women can’t make it to the top — and sometimes shouldn’t even try.It’s personal. As a teenager when I was still in Pakistan, a female “friend” of the family suggested that as a future housewife, I should study “home economics” rather than international politics. Others asked vaguely why I wasn’t thinking of attending a “finishing school” to make me into a perfect wife.“I plan to have a job,” I remember saying with some disdain. “But only if your husband allows it!” was the angry response.Well, luckily things turned out differently. Interestingly, at a recent dinner debate in Brussels on “women and development”, almost all female participants had very moving stories to tell of their different trajectories and of the men and women — mothers and fathers — who had helped or discouraged them on their voyage to self-fulfilment.There was talk of the “HeforShe” campaign that acknowledges that men have a key role to play in women’s empowerment. The importance of role models, inspirational mentors, hard-nosed teachers was stressed. Some women said their families had encouraged them to break away from stereotypes — others acknowledged that they did not have family support as they sought their own way in life.It was an evening of laughter and some tears. Of promises that as mothers, we were bringing up our sons and daughters differently, teaching them to respect each other.Women have achieved much over the years. But there’s still a long way to go. For all the howls of derision directed at him, Prime Minister Modi has done his bit to empower women through political appointments and social policies. After taking office last May, he appointed six women to his cabinet — the highest number in the history of the country.He has taken a strong stance against female feticide, which he called a “terrible crises” since India has a child sex ratio of 918 girls for every 1000 boys, a recipe for social unrest.It’s great he’s taken these and other steps — despite being a man.

View from Abroad: Europe waits for trade talks but Modi ‘looks East’ (Originally published 22/11/2014 at dawn.com)

These are busy times for Asian leaders — and Indian Prime Minister Narendra Modi is among the busiest.Last week as he criss-crossed Asia, clinching business deals, attracting much-needed investments and building strategic alliances, Modi found time for a quick meeting with the European Union’s outgoing European Council President Herman Van Rompuy to underline that the “EU should take advantage of the new economic environment in India”.The two men apparently agreed that the United Nations should hold an annual international “Yoga Day”.But not much was apparently said on the EU-India free trade agreement that the two sides have been trying to negotiate for the last seven years and which now seems to have run into the ground.EU officials are still hoping that the negotiations will be back on track soon. But the Indian leader is too busy looking elsewhere.As of this autumn, Modi has his nation and the rest of Asia abuzz with his determination to inject new life into India’s “Look East” policy which, following his incessant Asian travels, including recent talks with Asean (Association of South-East Asian Nations) and other Asian leaders in Myanmar, has morphed into what Modi proudly describes as a “Look East — and Act East” policy.India’s decision to step up its game in Asia is no surprise. As an emerging power with “great power” ambitions, India has no option but to seek a stronger role in a volatile neighbourhood and a region marked by often-changing geopolitical rivalries and alliances. Also, tapping into the region’s dynamic economies is critical for India’s own growth and reform agenda.Certainly, China has the funds needed to help finance India’s infrastructure requirements while Japan and South Korea have the technical experience and expertise. South-east Asian markets are important for Indian investors and exporters. Sustainable peace with Pakistan may still be a long way off but is essential for India’s development and peace and stability in the region.While in Myanmar, Modi made the headlines by pushing his “Make in India” campaign, which aims to turn the country into a global manufacturing hub, by cutting red tape, upgrading infrastructure and making it easier for companies to do business. Modi promised to implement long-delayed plans to boost trade and deepen ties with Asean so that current trade flows could rise from $75 billion today to $100 billion by 2015.In fact, the policy is not new. India has long spoken of developing a “Look East” policy, but has lagged behind China in forging ties with emerging economies in South-East Asia. Tackling China’s influence on Asean and South Asia is still a challenge but India benefits from the fact that Japan, Asean and others in the region are certainly looking to reduce their economic dependence on Beijing by reaching out to Delhi.Indian commentators also underline that Modi used the Asean meeting to articulate for the first time India’s intent to enhance “balance” in the Asia Pacific region, arguing that the word was carefully chosen to reflect India’s shared concerns with other Asian countries about China’s growing assertiveness in the region.Interestingly, Indian defence cooperation is being stepped up with several Indian Ocean states including Sri Lanka and Maldives. India will supply four naval patrol vessels to Hanoi as part of $100 million Line of Credit signed last month. The two countries have also decided to ramp up cooperation in the field of hydrocarbon, civil nuclear energy and space.Given Modi’s focus on the Asia-Pacific, the EU’s new leaders may have to wait a long time before he signals a real interest in upgrading bilateral ties.It is no secret that the EU-India strategic partnership needs a shot in the arm and that trade and investment flows are much too modest. But negotiations for an India-EU Bilateral Trade and Investment Agreement (BTIA) — the most important issue on the bilateral agenda — have lasted for seven years, with no end in sight. And hopes that New Delhi would put energy and effort into the successful conclusion of the elusive deal have not materialised, with differences over tariffs and market access as well as questions related to the protection of intellectual property rights continuing to impede progress.The pact could be signed in 2015 — but only if both sides can summon up the political will to look beyond the array of technical issues to the deeper strategic importance of their relations.Modi and the EU’s new leaders face the uphill task of taking the relationship to a higher and more genuinely strategic level, a move that would benefit both sides.In addition to the geopolitical value of such a decision, European investors are willing and eager to enter the Indian market. European know-how could be valuable to India’s reform and modernisation agenda. Europe, meanwhile, needs new markets to keep its modest economy on track.To inject momentum into the relationship, both sides will need to make an effort. EU and Indian leaders have not met for summit talks since February 2012. An early meeting between Modi and the EU’s new presidents of the European Commission and the EU Council this autumn will therefore be crucial in signalling a fresh start in relations.