 "India-EU free trade agreement may be finalised by next year")
The Free Trade Agreement between India and the European Union is expected to materialise next year once the country finalises its new foreign trade policy, a top official has said.
“We are actually not very far from the agreement but we are not there yet. I am quite positive that next year or so it would be possible to finalise the free trade agreement,” EU Ambassador Joao Cravinho told PTI.
He said parties on both the sides are engaged in good political conversations and there has been a commitment from both the sides on finalising the FTA.
However, this is yet to be translated into actual progress in negotiations, Cravinho said on the sidelines of the 22nd annual general meeting of the Council of EU Chambers of Commerce here over the weekend.
“The Indian government has been a little slow; slower than we wanted to, in producing the new trade policy,” the envoy said, but added that as the trade agreements last for as long as 15-20 years, a delay of a few months in policy formulation is not relevant.
Commerce and Industry Minister Nirmala Sitharman had in September said that the new five-year FTP would be different from the previous ones and hopefully announced soon. The policy is expected only from April next.
Earlier, the government had planned to introduce a new FTP immediately after the Budget in July but it has been delayed reportedly on account of some tax related issues between certain ministries.
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More Shorts“We expect that in the new year we will see a new trade policy. Once that happens, we will be able to sit down again and resume our negotiations,” Cravinho added.
The EU is open for an asymmetrical agreement, he said, adding, however, that both sides must be agreeable for a little bit of give and take.
He pointed to the difference in taxation on cars imports from Europe as opposed to cars being exported.
Cravinho said: “We understand India’s growth imperative and are keen to have a very positive interaction. And so the agreement will be asymmetrical. At the moment, tariff (on cars imported from Europe) is up to a 100 per cent, whereas the duty on car shipped to Europe is only 7-8 per cent.”
He added: “We are not saying they have to be equal on both sides but they should be proportionate…taxation has to come down quite significantly.”
India ships 2,00,000 cars to Europe each year while Europe exports about 40,000 cars to India, he said.
Cravinho said he is optimistic about growth in India, which is currently at a level well below its potential as an investment destination than many of its competitors.
“In my conversation with EU business leaders, and we share the optimism (on India), there is also very much a recognition that the environment for investment has not yet changed significantly. There has been some change but it is more of a psychological than substantive nature,” he said.
The government needs to improve the investment climate further, leading to increased inflows that will help build the country’s manufacturing capacity, he added.
Talking about the ‘Make in India’ initiative, Cravinho said it reflects the government’s ambition and will also help the country enter the global value chain.
He also said the last year’s ban by EU on India’s Alphonso mangoes is likely to be lifted soon.
PTI
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