Negotiations on the proposed trade and investment pact between India
and the European Union
(EU) will restart "once circumstances are right for both parties", European Commission President Jean-Claude Juncker
said on Friday.
Juncker told the media on the third and last day of his three-day visit to India
that talks should not start for the sake of starting over.
He stressed that further discussions with Commerce and Industry Minister Suresh Prabhu will happen later this week on the sidelines of the World Trade Organization's mini-ministerial taking place in Morocco on October 8-9.
The Bilateral Trade and Investment Agreement (BTIA) - the official free trade pact with the EU - has been pending since 2007 on account of a number of bottlenecks such as growing differences regarding greater market access sought by both for merchandise exports.
However, talks have hit a wall after India
decided to terminate existing bilateral investment treaties (BIT) with 23 European countries in 2016. Subsequently, the European Union
(EU) had warned that the move will stop investments from its member countries and asked India
to keep these individual agreements in force until a new agreement is signed.
has continued to maintain that all future investment pacts will be negotiated under the framework of the model Bilateral Investment Treaty released by the government back in 2015.
This is expected to form the basis on which individual agreements will be negotiated with other nations. However, the hitch lies in the fact that most negotiations are not time-bound whereas the existing treaties themselves would end over the coming year.
On the trade front, both sides had last year adopted an agenda in Brussels, which pushes for a broad based approach to "resolve trade irritants in particular concerning goods, services and investments, and strengthen trade and investment relations".
On this note, issues related to facilitation of greater movement of professionals from one country to another is another point of contention between the two sides. This also involves India's demands to be classified a data- safe country, which will help Indian information technology and outsourcing companies gain a foothold.
Juncker also stressed on strengthening bilateral programs on setting high standards of data protection.
Other than being India's largest trading partner and its biggest export destination, the bloc has also been New Delhi's 'strategic' partner' since 2004. Total exports to the 27 member nations of the EU including the United Kingdom reached $47.16 billion in 2016-17 from $ 44.46 billion. On the other hand, imports dipped slightly to $42.35 billion in the last financial year from $ 43.98 billion in 2015-16.
This translates to 17 per cent of total exports and 11 per cent of total imports for India.
The EU's share in India's total trade has also progressively shrunk in recent years. Indian exports to the block have shrunk from 21.84 per cent in 2004-05 to 16.04 per cent in 2014-15. Imports have witnessed a similar slide over the same period, going down from 17.30 per cent to 10.98 per cent.