India would stick to its demand for duty-free access to 95 per cent of the outward trade from India to the European Union (EU), against 90 per cent of that from the EU to India, for a free trade agreement (FTA), a top government official from the Union commerce ministry said.
While admitting that the persistent stand on the issue might delay the agreement, the official said, the talks were on track.
"We will maintain a hard line stand, and it is crucial to the talks," said the official. It is to be noted, the sixth round of EU-India trade negotiation in Delhi in March ended without any substantial progress because of the tariff-related issues.
The EU is India's largest trading partner, and the total bilateral trade stood at over $70 billion in 2008-09.
Apart from the EU, India is also negotiating on FTA with the European Free Trade Association (EFTA), that includes Switzerland, Norway, Iceland and Liechtenstein.
The India-EFTA two-way merchandise trade touched $4.1 billion in 2008. Some of the major items imported by EFTA from India are organic chemicals, precious stones, textiles and clothing, machinery and mechanical appliances, among other things.
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India's trade with EFTA has been growing over the years,and exports to EFTA countries stood at $936 million between April 2008-February 2009.
India mainly imports electrical machinery, precious stones chemicals and pharmaceuticals, plastics, optical, medical and surgical instruments from EFTA.
In the possible FTA with EFTA, India is expected to commit a zero duty customs regime on substantially all imports from EFTA, and similarly EFTA is expected to commit to zero customs duty regime on substantially all imports from India.
Both the trading blocs will have the flexibility to exclude certain products from the schedule of tariff elimination.