In a desperate move to bag the deal, the department of commerce under the ministry of commerce and industry has sought Prime Minister Manmohan Singh’s intervention to address some powerful lobbies opposing the ambitious India-European Union (EU) free trade agreement (FTA), that would slash tariffs across sectors from cars to wines.
The department has written a letter to the PM in which it has enumerated why the deal is taking time. There have been 13 rounds of rigorous talks to close the deal in the four years since it started in June 2007.
The department has informed the PM of pressure from the automobile industry and by wines and spirits businesses in stopping the progress, for fear of losing competitiveness. India’s auto industry enjoys 60-70 per cent tariffs, while the import duty on wines and spirits is a whopping 150 per cent. The EU has asked India to reduce these substantially under the deal, so that goods from there get more access to India’s teeming markets.
Last week, the EU’s director-general for trade, Jean-Luc Demarty, had met Union commerce secretary Rahul Khullar on this issue and asked India to wrap up the talks in time for the next India-EU summit. “There is intense effort on both sides to close the deal and there is a determined resolved by both parties to make this happen. Right now, the talks have reached the most crucial part and over the next two months, the challenge will be on how to close the deal,” Khullar told Business Standard.
Both sides would soon be holding talks on trade in services during the week starting November 14. India’s main demand in the services trade with EU is on movement for professionals such as lawyers, chefs and accountants, to get more job opportunities in all 27 countries of that bloc. India is also seeking a liberal visa regime for movement of business people and exporters.
By the end of November, India’s new chief negotiator would be visiting Brussels to take the deal forward and finalise details with his counterpart there. P K Chaudhary, who was chief negotiator, is moving to another position within the government and no one has yet been appointed to do the job.
All eyes are now on the coming meeting of the G20 group of countries this week, when the PM is expected to discuss the issue of closing the deal on the sidelines, when he meets European Commission chief Jose Manuel Barroso in Cannes, France.
Officials said both sides would also be holding a brainstorming session on the deal during the meeting of trade ministers at the World Trade Organisation in Geneva.
