India-EU FTA: Merkel, Singh say 'almost there'

Prime Minister Manmohan Singh and German Chancellor Angela Merkel today indicated more common ground might have been found on issues that holding back the much-awaited India-European Union (EU) free trade agreement (FTA), though the deal itself might still be some time away.

Addressing a joint press conference after the conclusion of the intergovernmental consultations  here, Merkel’s reply to a question on the FTA was measured. “We’re almost there, (though) we’re not over all difficulties and (have) not reached a full agreement.” Singh said there were “issues that have held back the FTA, but there has been progress as well”.

As India’s largest trade partner in the 27-nation EU, Germany’s buy-in is critical to the successful culmination of the FTA. Issues such as the level of tariff protection for the Indian automobile industry, data secure-status for India and raising foreign direct investment in insurance from 26 to 49 per cent remain. These would be taken up at a ministerial meeting in Brussels on April 14-15.

While Merkel said the automobile sector was “very important for my country”, Singh said he had told Merkel “we’re committed to insurance sector reforms” and that the Indian Cabinet had cleared the proposal; it needed parliamentary approval. Later, Foreign Secretary Ranjan Mathai said the government would work towards political consensus on the issue.

“Issues around agriculture, geographical indicators and non-agriculture market access are already resolved. On other issues, we have to temper ambitions on both sides,” said Commerce & Industry and Textiles Minister Anand Sharma, who would lead the minister-level talks with EU representatives starting Sunday. “In the FTA, there would also be a chapter on investment protection,” he added.

Ministers and officials from both countries today signed an inter-governmental memorandum of understanding (MoU), as well as five joint declarations of intent, in the presence of Singh and Merkel. While the MoU was in the field of higher education, the joint declarations pertained to promoting German as a foreign language in India, cooperation in civil security research, food and agriculture, quality infrastructure and the development of ‘green energy corridors’.

In his opening statement after the intergovernmental consultations, Singh said, “Economic ties have been a defining feature of our relationship. I encouraged increased German participation in India’s rapid economic growth and our plans to modernise our manufacturing and infrastructure sectors. We agreed on the importance of an early conclusion of a balanced India-EU broad based trade and investment agreement.”

Merkel termed her country’s relationship with India was “very deep”. She spoke about the infrastructure and investment opportunities a country with a billion people provided to Germany.

Singh said a ‘high technology partnership group’ agreement had also been signed (India has one such pact with the US). “This will essentially be a process by which export clearances are granted on items of high technology and/or with ones with some form of control,” Mathai said.

On Indo-German strategic ties, Singh said the talks focused on “our efforts, through the G-4, for the reform of the United Nations Security Council to reflect the current realities. We also emphasised the importance of sustained international support to Afghanistan through its transition to a stable, peaceful and democratic future. We called for an end to violence in Syria and a peaceful resolution of the Iranian nuclear issue. We underlined our shared interest in peace and stability in the Asia-Pacific region, including in the Korean peninsula.”

PACTS SIGNED

Renewable energy

•  MoU between Solar Energy Centre and Fraunhofer Institute for cooperation and exchanges in various areas of solar energy

Science & technology

• Programme of Cooperation between Dept of Biotechnology of India and Helmholtz Association in the area of development of future natural drugs
• Supplementary MoU on Research Framework of the Indo-German Centre for Sustainability at IIT, Madras under the National Climate Action Plan

Railways

• MoU between Deutsche Bahn and Indian Railways for cooperation in the field of freight, passenger operations, infrastructure building, etc
• MoU between DB Systel and Centre for Railway Information Systems for cooperation in the field of information systems

Vocational education & training

• MOU between Hof University of Applied Sciences & Integrated Association of MSMEs of India to develop specialized vocational training course
• MOU between Manipal University, India & Bavarian Universities Consortium represented by Hof University, Germany to establish the Indo-Bavarian Integrated Bachelors & Masters programme in Aug 2013
• MoU between Infosys Ltd and Bertelsmann Stiftung
• MOU between PSG Institute of Advanced Studies & Professional Training Centres of the Bavarian Employers Association
• Contract agreement between Cairn India and TUV Rheinland to set up a state-of-the-art vocational education training facility in Rajasthan