India waits for dates to resume trade negotiations with EU

Nirmala Sitharaman commerce minister, after returning to India after attending the latest India-EU summit has written to EU trade negotiators to suggest dates when they could resume trade negotiations talks. There is not yet hear from them yet PM Narendra Modi travelled to Brussels for the summit on March 30.

EU officials have unofficially told journalists they wanted India to open up the automotive sector by lowering tariffs to zero before they restart negotiations. India wants to protect the domestic auto industry which has acquired a degree of competitive advantage.

This has been interpreted by EU officials as “intransigence” by India. Indian officials however say EU is unwilling to move on services which is making things difficult. However, the Indian government has a harder job, because it is battling a global perception of being a laggard in international trade negotiations.

The EU is fighting its own issues this year — officials say all of 2015, EU trade negotiators were consumed with negotiating the TTIP with the US, which is yet to be completed. It’s only now they have spared some officials to negotiate the India FTA. In addition, a potential Brexit and continuing problems with Greece and the Mediterranean economies have imposed uncertainties in the European trade horizon.

Amitabh Kant, CEO Niti Aayog at the launch of a World Bank report on the textile sector stressed gains from rising labor costs in China would flow to Vietnam and Bangladesh rather than India. India should conclude the EU-India FTA even if it means making some compromises.

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