EU paper may propose FTA with India

The European Commission will unveil an India strategy paper next month, where a free trade agreement (FTA) between the 25-member trading block and India, may be proposed. The strategy paper will pave the way for bilateral discussions in future.

European Commission sources said the strategy paper was still being finalised and it was not certain if an FTA would be recommended to enhance EU-India ties.

"It is certainly an item of discussion. The paper will recommend new areas of co-operation and will focus on deepening the existing ties and upgrading the relation between the two to that of a strategic partnership," said a Commission official.

Spokesperson to EU Trade Commissioner Pascal Lamy told Business Standard, "EU's first priority was to negotiate with countries under the multilateral framework of the World Trade Organisation."

There were proposals from countries like Canada, Singapore and the Association of Southeast Asian Nations (Asean) for an FTA with EU.

However, the EU should be thinking of improving trade relations with India, the spokesperson said.

"We do not exclude the fact that India will be interesting to us. We are thinking of ways to enhance trade and investment relations with India as a short-term and medium-term project," she said.

The EU was also simultaneously concerned that it did not send mixed signals about forging relationships with WTO member countries.

But, that doesn't mean that developing countries were any less important. "India, China, Brazil and Argentina are important too. Last year, Lamy went four times to China, thrice to the US and twice to India," the spokesperson said, indicating the importance EU gave to emerging economies.

The Commission sources said trade and economic relations between India and the European Union were just one facet of co-operation between the two.

"There are several other areas like science and technology and defence where the two can share inputs," they said. For instance, both the European and Indian peacekeepers worked together in Bosnia, they pointed out.

The sources said the strategy paper would be placed before the Council of Ministers and then discussed in the EU Parliament. It would subsequently be sent to the Indian government.

The EU had only last year unveiled a similar strategy paper on China to which the Chinese government replied with its views.

The India strategy paper was expected to be finalised by June and presented to the Indian government, they added.

(The correspondent went to Brussels on the invitation of the European Commission's office in India)