| NEW DELHI
NEW DELHI Dec 9 Negotiations on a free trade
pact will top the agenda at a summit of Indian and European
Union (EU) leaders on Friday, an agreement that could generate
two-way trade worth about $134 billion, officials said.
Here are some questions and answers on issues at the 11th
India-European Union Summit to be held in Brussels, which will
also be Indian Prime Minister Manmohan Singh's first trip to
Europe since its Lisbon Treaty came into force.
WHAT IS THE TRADE DEAL?
India and the European Union launched negotiations for a
free trade and investment agreement in 2007. An agreement is
expected by the middle of next year or perhaps sooner.
European exporters see an enormous opportunity in
everything from cars to fashion and luxury goods in the
world's second-fastest growing major economy with a potential
customer base of 1.2 billion people and a rapidly expanding
For India, the European Union is its largest trading
partner despite a recent slowdown following the euro zone
crisis. The Indian government has been aggressive in its push
for free trade agreements and sealed a deal with Japan in
But the talks on a pact have run into differences, such as
over EU efforts to link it with sensitive topics such as
India's performance on climate change and reducing child
labour, and over greater market access.
Such efforts grate with Indian trade officials, who see
them as irrelevant to negotiations for a commercial
partnership. The details of what Europe wants have not been
revealed but any deal will have to be acceptable to its
Complications have also arisen over the possibility of the
proposed pact leading to easier immigration rules for Indians
seeking to find work in Europe, particularly Britain which has
The two sides have missed a previous target of October
2010 to conclude the deal, negotiations for which must satisfy
a wide range of stakeholders and the interests of a total of
more than 1.5 billion people.
India's trade minister has said the deal was awaiting
"finishing touches" but it will almost certainly not be signed
during the summit as the two sides iron out the last hurdles.
Two-way trade between India and the European Union touched
$92.2 billion in 2009 in goods and services, but the figure
could rise to $134 billion (100 billion euros) if the free
trade agreement goes through, senior Indian Foreign Ministry
official Vivek Katju said. The proposed pact is expected to
help bilateral trade exceed $237 billion by 2015.
Against a backdrop of uncertain progress on the Doha
global trade talks, India has pushed ahead with free trade
agreements with countries such as South Korea and the ASEAN
bloc of Southeast Asian nations. [ID:nDEL520335]
ARE THERE ANY OTHER TRADE ISSUES?
India and the European Union have a running dispute over
Indian generic drugs in a case dating back to the seizure by
Dutch customs in December 2008 of an Indian blood pressure
drug in transit to Brazil. The row highlights disagreement
between those who call for the protection of the intellectual
property rights of drug companies and others pushing for
greater access to cheap medicines.
Activists have said the case represented a more aggressive
stance by patent rights holders which could undermine the
supply of cheap drugs to developing countries. Indian trade
officials initiated the first steps of a trade dispute at the
World Trade Organisation (WTO) this year and have reserved
their right to escalate the case even as they work towards a
solution with their European counterparts.
Indian Trade Minister Anand Sharma has said the two sides
have come to an "understanding" on the matter.
Indian trade officials have complained of what they see as
the unfair obstruction of goods to Europe, such as farm and
fishery goods on safety grounds. But accusations of
protectionism can cut both ways. India has launched more
anti-dumping investigations than any other country this year,
according to the WTO.
India, a cotton exporter, has also complained of European
moves to give concessions to Pakistani exporters after recent
flooding that engulfed much of India's neighbour, saying it
was unfair to other countries.
WHAT ARE THE OTHER ISSUES?
India and the 27 country-EU bloc also seek to cooperate
more on global issues such as financial imbalances, security,
trade and climate change. As a major member of the Group of 20
countries, India's views on the euro zone crisis could be of
significance and the two sides could also discuss reform of
the international monetary system and improvements in global
As India increasingly looks to the United States on global
issues from trade to climate change and security, Europeans
have appeared to lag in engaging Asia's third-largest economy.
India will seek clarity on European plans in war-torn
Afghanistan and India's role there and will also try to
extract European pledges for green technology support.
(Editing by Paul De Bendern)
(If you have a query or comment on this story, send an email