case-for-india-eu-btia

One of the longest-serving EU foreign ministers, Mr Rinkevics, at Raisina Dialogue called for a comprehensive trade deal between India-EU to improve the trade figures.

Background:

  • India-EU Broad Based Trade and Investment Agreement (BTIA) negotiations started on 28th June 2007, India in Brussels, Belgium.  
  • The BTIA objective is to promote bilateral trade by removing barriers to trade in goods and services and investment across all sectors of the economy.
  • The comprehensive and ambitious agreement (BTIA) is consistent with WTO rules and principles.
  • The negotiations cover Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, etc.
  • The negotiations were suspended in 2013.

Case for India-EU BTIA

  • Trade: EU is India’s largest trading partner with about $108 billion trade in goods in 2018-2019, and $42 billion in services. 
  • FDI: EU is the largest source of foreign direct investment for India.
  • SMEs and Start-up Ecosystem: European companies, many of which are start-ups and SMEs, are strong in areas such as technology, environment, communications, energy and infrastructure. It can open the doors for technology, process sharing.
  • Human Development: Jointly, the EU and India represent close to 2 billion people, who can positively influence not only the economic discourse but also the course of human development.
  • Increased Market access for sectors such as gems and jewellery, textiles and agriculture in the wake of RCEP exit. Also, it would open up new markets like Latvia for IT-enabled services.
  • Hampered Investment: Several EU countries are hampered in investing in India without an investment agreement in place.

Issues in India-EU BTIA

Objections by EU:

  • Inadequate access to Automobile, Wine and Spirit sector of EU and consequent high tariffs.
  • India didn’t agree upon the opening of the financial services sector like banking, insurance and e-commerce.
  • India’s demand to Include services and more visas for Indian professionals.

Objections by India:

  • EU has asked to include labour and environmental issues in the pact, which are of the TRIPS-plus nature and India has strongly objected to it.
  • EU has reservations over Issues of Data Security and Intellectual property.

Steps were taken to resolve the Issues:

  • The EU has released a strategy paper to strengthen ties with India and this strategy paper reflects that the EU has taken India’s priorities on a serious note.
  • Post-RCEP Exit, Indian Government is keen on resuming talks of India-EU FTA. A status report is being prepared by the Commerce Ministry on the recent engagements between India and the EU on the proposed BTIA.

Way Forward for India:

  • India needs structural reforms in the field of Data Security, Intellectual Property etc.
  • Labour laws, Occupational Hazards, Environment related issues must be taken on first priority.
  • On the external trade front, High tariffs, logistics delays, Red tape must be dealt with
  • India also needs to increase its export competitiveness in the labour-intensive sectors to keep pace with Bangladesh, Thailand, etc.

With the proposed Four Labour codes, Data protection Laws, focus on renewable energy, India is steering in the right direction.

Also readIndia’s exit from RCEP: Reasons and analysis

Japan says it won’t sign RCEP

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