The European Union will offer more concessions that India in the proposed free trade agreement.
The EU Ambassador to India Joao Cravinho on Friday said: "Concessions to be offered by EU will be more than those provided by India. However, it will benefit both." The challenge in the execution of the FTA was quite big as it was going to cover a population of 1.75 billion, he said. "By far, the FTA between EU and India will be the biggest, considering the coverage of population. But at the same time it will be deep in terms of level of tariff reduction and the sectors that will be covered. India and European Union (EU) are yet to arrive at a consensus on opening of markets for services, wine, spirits and automobile sectors., he said.
Besides, both the countries still differ on the issue of sanitary and phytosanitary standards (SPS) applied by EU. However, Cravinho said, given the level of complementarity between the two economies, EU and India would successfully arrive at an agreement to finalise the deal by the end of the year.
Speaking at the sidelines of the FICCI's national executive committee meeting here, Cravinho told Business Standard: "Currently, a lot of technical negotiations are going on between EU and India. There has been a high level of ambition but both EU and India are not underestimating the complexity of issues faced by both. There is a question of opening of markets by both in services sector and also in wine, spirits and automobile. One thing is clear that EU and India have gone too far down the road and it is difficult to turn around. We are hopeful that FTA will be finalised by end of year."
He said EU and India negotiators were tying up the loose ends.
As far as SPS is concerned, Cravinho admitted that Indian companies have raised concerns about the standards. Similarly, EU has put up its argument in favour of SPS. "However, the proposed FTA will devote a special chapter on SPS as well as non-tariff barriers. The objective is to ensure uniform trade advantages and safety for consumers," he added.
Cravinho said the FTA could provide a stimulus for further opening of the Indian economy and it will have a multiplier effect. "Indian economy is still inward-looking. This policy served quite well in the past but it may not do so in future in the current globalisation. If Indian economy remains protective, it will continue to be less competitive. However, I strongly believe the FTA can provide stimulus for further opening of the Indian economy."
As far as the opening of the multi-brand retail is concerned, the EU Ambassador noted that the Indian government has clarified that it was consulting cross sections in order to arrive at a consensus before putting in place a legal framework.
On trade between EU and India, Cravinho said there was further scope to tap potential. "Trade between EU and China is six times compared with India. Chinese economy is three and half times of India. However, due to complementarity in economies and democratic set up, trade will further grow between EU and India," he added.
