The 12th EU (European Union)-India Summit, to be held on February 10, would take stock of the progress so far in negotiations between both the sides on the ambitious free trade agreement (FTA). It would also discuss other bilateral issues concerning economic cooperation between India and the EU, climate change, energy and science and technology.
The 27-nation bloc EU would be represented by Herman Van Rompuy, president of the European Council, and José Manuel Barroso, president of the European Commission. The two would hold high-level talks with Prime Minister Manmohan Singh.
Issues concerning trade and investment would be high on the agenda during the one-day summit, which would see participation by EU business and industry. Commerce and industry minister Anand Sharma is meeting his EU counterpart, Karel De Gucht, to identify a timeline within which talks for the FTA, formally called the EU-India Broad-based Trade and Investment Agreement (BTIA), would be concluded.
The negotiations for the BTIA started in 2005 and so far, 13 rounds of formal negotiations have been held. It has missed several deadlines, owing to differences between the sides over industrial tariffs and market access.
According to officials in the ministry of commerce and industry, the talks are in the “closing stages and considerable progress has been made.” However, EU still has some concern over India’s high tariffs in wines and spirits and automobile industries. On the other hand, India has been demanding greater access for its services professionals to European markets.
“I do not think anything major is expected out of this summit. We are still a bit stuck. We are not covering much ground in some issues. I hope we achieve some headway this time during the meeting between Barroso and Prime Minister Singh," said Rajiv Kumar, secretary general, Federation of Indian Chambers of Commerce and Industry.
However, the government is facing stiff resistance from a few sections of the industry, especially the auto industry, to signing the FTA. Opposition parties have also asked the government not to go ahead with the BTIA. According to Bharatiya Janata Party national spokesperson and member of Parliament Prakash Javadekar, the government should resist from making any commitment in the agreement without prior consultations.
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The EU is India’s largest trading partner, accounting for approximately €86 billion in trade in goods and services in 2010. Bilateral trade in goods alone rose 20 per cent between 2010 and 2011. The EU accounted for 19 per cent of India’s total exports and 14 per cent of India’s total imports in 2010. On the other hand, India accounts for 2.6 per cent of the EU’s total exports and 2.2 per cent of the EU’s total imports, indicating huge potential.
The proposed FTA with EU would result in the removal of import duties on more than 90 per cent of total tariff lines. Both the sides have set a target of scaling the bilateral trade in goods and services to $200 billion by 2013.
The EU-India Summit would also seek to expedite activities concerning climate change and clean energy efficiency. In 2008, both the sides had launched the Joint Work Programme on Clean Development and Climate Change. A joint EU-India call for proposals on solar energy research was launched in 2009, with a contribution of €5 million from each side.
India has become the fourth-largest international partner for the EU under the Seventh EU Framework Programme for science and technological development (2007-2013). The country has also become a full partner in the International Thermonuclear Experimental Reactor nuclear fusion project.
During the summit, both the sides are expected to discuss issues concerning global economic governance and the G20 process. A memorandum of understanding on statistical cooperation would be signed to facilitate exchanges on statistical information and methods.