Renewed talks over India-EU FTA 'likely to be delayed'

Legislation | | MIC Customs Solutions |

A delay to FTA discussions between India and the EU is looking increasingly likely.

The resumption of talks over a planned free trade agreement (FTA) between India and the EU are likely to be delayed, according to a source close to the discussions.

An anonymous commerce ministry official told Livemint that although both parties are keen for a new deal to be agreed, further talks between senior officials on both sides will be needed before formal negotiations can commence in earnest.

The FTA was first mooted in 2007, but progress on the deal has faltered on a number of occasions. A stock-taking meeting planned for August 2015 was cancelled due to India's dissatisfaction over a European ban on the sale of around 700 pharmaceutical products that had been clinically tested by the Indian firm GVK Biosciences.

Although a subsequent meeting held last month went more positively, there remain a number of issues that need to be discussed and agreed upon before the agreement process can resume.

For example, the EU is keen for India to show more flexibility in the import of European automobiles, wine, cheese and legal services, while many Indian companies are worried about the adverse effect of existing FTAs, which have been said to have increased the country's reliance on imports, making Indian businesses less competitive.

Concerns have also been raised over the risk of an India-EU FTA impeding access to cheaper Indian-made generic medicines in developing nations, potentially because Europe may insist on more stringent intellectual property rights protection being implemented.

The official said: "It will not be a great loss to India if the deal does not happen. They are already our largest trade partner without a trade deal and will continue to be so. Of course, an FTA will boost a few sectors on both sides. We could gain in textiles and fisheries."