Merkel, Modi meet to resurrect trade talks

India believes it is only German Chancellor Angela Merkel who can inject a fresh life into the talks that started eight years ago

The logjam in the India-European Union (EU) free trade agreement (FTA) talks might get finally broken when German Chancellor Angela Merkel and Prime Minister Narendra Modi sit for yet another bilateral meeting on Monday.

Germany is India's largest trading partner in the EU and Merkel is undoubtedly the EU's most influential leader. India believes it is only the Chancellor who can inject a fresh life into the talks that started eight years ago.

However, for the talks to start, it is essential both sides find a resolution to the issue of pharmaceutical exports from India to the EU, which is often subjected to intense scrutiny and several other non-tariff barriers.

"Germany and India share a special and cordial relationship. I am sure Chancellor Merkel will revive the talks and create a conducive atmosphere for the negotiations to take place. The issue of banning of drugs from India needs to be solved. Both the leaders will discuss the matter and the talks will resume soon, I believe," Minister of State (Independent Charge) for Commerce and Industry Nirmala Sitharaman told Business Standard .

In August, India and the EU were planning to make an assessment of the current state of negotiations with the meeting between chief trade negotiators from both sides. But India chose to defer the talks when the EU imposed a blanket ban on import of 700 drugs being tested in Hyderabad-based GVK labs.

Sitharaman believed then that the atmosphere was "not conducive" enough to carry on the talks. She was also irked by the fact that EU did not respond to the questions raised by her and even by PM Modi.

However, all such thorny issues are now likely to be erased with both leaders meeting and even holding a joint Intergovernmental Consultations (IGC) apart from a bilateral meeting.

IGC is like a Cabinet meeting that both partners hold every alternate year. This is going to be the third. Apart from leaders, who will be chairing it, six Cabinet-level ministers from India and Germany will be present at the meeting.

ACHTUNG DIPLOMACY

n Germany is India's largest trading partner in the EU and Merkel is undoubtedly the EU's most influential leader
n In August, India and the EU were planning to make an assessment of the current state of negotiations with the meeting between chief trade negotiators from both sides. But India chose to defer the talks when the EU imposed a blanket ban on import of 700 drugs being tested in Hyderabad-based GVK labs
n According to a research note by the CII, German participation can be sought in the areas of new and renewable energy, start-ups, smart cities and Skilling India

n Two-way trade between India and Germany reached $20.3 billion in 2014-15, from $18.6 billion in 2010-2011