At $43 billion, the EU —including the UK — made up for 17.6% of India’s goods exports in the first 10 months of the current fiscal, while imports from the bloc stood at over $39 billion. Garments were India’s biggest exports segment, followed by engineering goods and gems & jewellery.
With threats of a global trade war looming, commerce and industry minister Suresh Prabhu on Monday hinted at an early resumption of negotiations over the long-stalled free trade agreement (FTA) between India and the European Union. “We have started working on the India-EU FTA again. We have invited them and are looking at it,” the minister said. Access to the EU market is crucial for a number of Indian sectors, especially textiles and
garments and IT. Similarly, India is a lucrative market for the European auto and pharma companies. At $43 billion, the EU —including the UK — made up for 17.6% of India’s goods exports in the first 10 months of the current fiscal, while imports from the bloc stood at over $39 billion. Garments were India’s biggest exports segment, followed by engineering goods and gems & jewellery. Similarly, the country imports capital goods and gems and precious stones worth billions of dollars from the EU.
As many as 16 rounds of negotiations took place between the two sides for the proposed FTA — officially dubbed as Bilateral Trade and Investment Agreement (BTIA) — from 2007 to 2013 before formal talks were stuck. Senior Indian and EU officials had met late last year to explore a way forward for the long-pending negotiations. Inflexibilities from both the sides and Brexit delayed resumption of formal negotiations. Differences have persisted on the broad contours of the proposed FTA, including EU’s insistence that India cut import duties on auto parts and wine and strengthen intellectual property rights regime and the Indian demand for more liberalisation in services and greater flexibility on data privacy.
India also feels the flexibility shown by it in further opening up to foreign investments in more than a dozen sectors should be considered positively by the EU. The matter is crucial as it will have a bearing on Indian IT companies wanting market access. On India’s strategy in view of rising trade protectionism, Prabhu said: “We have decided that we will be a country which will engage with all of our traditional friends, and at the same time, start making new friends.”