EU India Free Trade Agreement (FTA) May Be Narrowed Down Due To Differences

EU India Free Trade Agreement (FTA) May Be Narrowed Down Due To DifferencesThe European Union and Indian Free Trade Agreement (FTA) has never been smooth. Whether it is border enforcement of intellectual property rights (IPRs) of Indian goods meant for third countries destinations or dispute at WTO the negotiations between EU and India were never hassle free.

Even some controversial dialogues like removal of India from Generalised Systems of Preferences (GSP) Scheme of EU, disagreements over TRIPS Plus provisions vis-à-vis IPRs, issues of Data Exclusivity, etc also surfaced. However, all these issues were amicable settled between India and EU.

Further, India is expecting a Data Secure Nation Status from European Union.  Once this status is granted, formal objections against India as a weak data protection nation would be discarded out rightly. This would also attract more outsourced work in India.

However, EU is in no mood to confer this status upon India lightly. EU has refused to grant data secure status to Indian information technology companies and instead offering a data adequacy status. Similar status has been given by EU to U.S.

India has also made its stand stern and has declared that it may sign a FTA with EU with a narrow political window. This means that India would be unwilling to offer further tariff cuts for automobiles and would provide no room to flexibilities on pharmaceuticals and government procurement.

EU has been raising various demands for the past seven years since the negotiations began. Some of them are not even tenable at the moment. For instance, regarding the government procurement, EU has demanded commitments based on the proposed public procurement law, which has not even been placed before Parliament. India has given an assurance that it would look into the matter once the law is passed but for EU it is a pre condition for the FTA.

EU is pushing for preference in government purchases for European companies, which is unacceptable to India as India is willing to ensure that orders above a specified value are bid out and European bidders are not at a disadvantage.

EU is raising issues at the last minute where political consensus is very difficult to achieve. India would be witnessing general elections next summer and with the present pace, a FTA between EU and India is not possible. So as on date there seems to be a deadlock between EU and India on the FTA.

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