Germany and UK 'would benefit most from an EU-India trade deal'

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Germany and the UK would be the greatest beneficiaries of a trade deal between the EU and India, according to analysts.

The EU and India remain deadlocked in talks about a free trade agreement (FTA), but it will be of great benefit to Germany and also the UK if an agreement can be reached, according to the deputy head of mission of the German Embassy in India, Jasper Wieck.

Speaking at a round table on the FTA in New Delhi organized by BusinessLine in association with the Bertelsmann Stiftung of Germany, Mr Wieck said there is a danger that "those opposed to the India-EU FTA will keep finding reasons to delay it".

However, he said, pushing ahead with a deal will bring great benefits to all sides, while arguing that some of the warnings against a deal are unfounded.

Mr Wieck explained: "Some fear that the FTA will put domestic players at unease. But protecting existing investments is also a part of the FTA negotiations. I object to the notion that an FTA would put the domestic auto industry in India at risk from German counterparts."

A study by the Bertelsmann Stiftung said Germany and the UK will get the greatest absolute benefits from any FTA with India, although India does stand to lose 21 per cent of the gains because of Brexit. Barring a U-turn by the UK on exiting the European Union, the only way this could be recouped is through India negotiating a separate trade deal with the British government. 

Counsellor for trade and economic affairs in the EU Delegation in India, Marika Jakas, told the discussion that an FTA will be particularly helpful to the EU in the textile and agricultural sectors.

However, India still has a number of concerns that could remain sticking points. Among these are the matter of data adequacy, with the EU insisting that India can only be given 'data secure' status separately from the FTA, whereas India wants the two to be linked. 

Other concerns include the EU's chapter on labor and environmental standards that would apply to Indian workers under the implementation of EU 'sustainable development' rules in the FTA. Ranja Sengupta of Third World Network said the chapter is "cosmetic" and some FTA provisions could be "very adverse for Indian workers".