Mumbai: Hoping for an early resumption of the stalled negotiations on free trade agreement (FTA), European Union ambassador Joao Cravinho has said it will require a lot of “give and take” before the two sides arrive at an understanding on key pending issues.
“Of course, the signing of the FTA requires a commitment on both sides… of course it will require concessions by both the sides. There is always an element of give and take,” Cravinho said in an interaction during his recent visit to the city.
Stating that the EU has not held any “negotiations,” on the impending FTA with the Narendra Modi government so far, the EU envoy said, “We are looking forward to shaking up conversation with the new government in the next couple of months.
“I believe, actually we are not very far from an agreement,” Cravinho said, adding that reaching an agreement will be in the interest of both sides as the advantages
outweighs the disadvantages.
The FTA negotiations were initially launched way back in 2007 and reached a critical phase in 2012, with focal talks being held on improved market access for goods and services, a chapter on government procurement and retrospective taxation.
Previously, the EU ‘disengaged’ itself from broad-based bilateral trade and investment agreement (BTIA) talks for over six months when the UPA government was unable to meet EU demands. These included eliminating or drastically reducing duties on European-made vehicles, vehicle components, wines and spirits.
For the Indian side, among other issues, granting of data secure nation status by the EU is very crucial as it will have a bearing on its IT companies wanting market access there. New Delhi also wants a liberalised visa regime for its professionals and greater market access in services and the pharma sector.
Besides demanding significant duty cuts in automobiles, the EU side is pressing for tax cuts on wines & spirits and dairy products and a strong intellectual property regime.
“Both the sides are very complimentary and so it makes lots of sense for us to reach an agreement because there will be huge benefits for both sides. Yes, we have difficulties in one two sectors, but I am convinced that we will overcome these difficulties,” the EU envoy said.
There is a lot of “enthusiasm” amongst European investors after the Modi government came to power notwithstanding certain fundamental issues which remain unchanged at this stage, he said.
“But the mood has changed significantly and what I hear from our businesses is that they are looking forward to invest more here….they believe that India is the land to invest much more over the next few years. Yes, currently they are not in a position to significantly increase their investments because of certain issues. But they believe that this is going to happen in the next couple of years,” Cravinho said.
He also noted that Europe is India’s largest economic partner and the biggest source of FDI.