EU open to India’s tariff offer, silent on opening up its service sector

27 Apr 2016


The European Union has said it would consider India's offer of a gradual elimination of import tariffs on cars and wine – two major items of export from Europe – but the two sides are yet to agree on when and how to begin negotiations.

Brussels, however, is silent on India's demand for access to European markets for Indian service professionals (such as from the IT sector). This for the European Union is not an imminent possibility as it is not ready to open up.

Nor is there any word on India's demand for ''data secure'' nation status from the EU, which is crucial for expansion of its IT and ITES trade.

''The evaluation that we made of the Indian proposal was that, yes, it would be difficult to accommodate the way it was expressed,'' Daniel Rosario, a European Commission spokesperson for trade articulated before a delegation of guest journalists from India.

Despite last month's India-EU summit meeting, when Prime Minister Narendra Modi visited Brussels, the two sides are yet to agree on a time frame for resuming talks on a free trade agreement.

Senior EU representatives have been in constant talks with officials of India's ministry of external affairs and the commerce ministry for quite some time but have so far failed to sort out important issues and prepare ground for negotiations.

EU, which has been harping on the nearly 100 per cent import duties imposed by India on cars and car parts and up to 150 per cent tariff on wines and spirits, is willing accept long transitional periods for their elimination as also an asymmetric phase-out for the bilateral free trade agreement known as the Broad-based Trade and Investment Agreement (BTIA) to take off.

For India, however, access to European markets for its service professionals (such as from the IT sector) is high on the priority list. But, with the EU ignoring this and the other demand for assigning 'data secure' nation status by the EU, the prospects of negotiations starting any time soon is uncertain.

Another and more important thorn in India-EU trade relations is the negative impact it would have on India's generic drugs industry. The EU is determined to hamper access to India's generic drugs in the European markets.

''Access to medicines is an essential pillar of the EU's policy on intellectual property and this is fully taken into the negotiations with India, and the trade agreement we want to establish with India will not undermine India's right to produce generic medicines either for domestic or international purposes,'' Rosario said.

Rosario also discounted the possibility of disintegration of the European Union once Britain makes an exit after the 23 June referendum on EU membership.

Meanwhile the EU is in negotiations with the United States on a transatlantic bilateral trade agreement, the TTIP.

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