[Answered]What are various roadblocks to India-EU Free Trade Agreement? How can these roadblocks be removed?

Demand of the question

Introduction. Contextual introduction.

Body. Discuss various roadblocks to India-EU Free Trade Agreement.

Conclusion. Way forward.

India-European Union (EU) FTA, officially known as the Broad-Based Trade and Investment Agreement, has been being negotiated since 2007. However, it has not been materialised into a deal due to various outstanding issues between India and the EU.

Various roadblocks to India-EU Free Trade Agreement:

  1. Mobility of professionals: EU does not have a common working visa system, it restricts free movement of an Indian professional across EU nations. The absence of free mobility of professionals in the EU is a major hindrance and India is seeking a permanent solution to the issue.
  2. Access to EU market: Indian companies are finding it increasingly difficult to access the European markers due to the rising non-tariff barriers in the form of technical regulations, phytosanitary measures, industrial standards, conformity assessments or barriers to services exports.
  3. Intellectual property issue: One of the obstacles to an agreement are the EU’s demands for a stronger intellectual property regime in India and the inclusion of a sustainable development chapter with strong labour and environmental protections.
  4. Dispute settlement mechanism: Another area of friction is the EU’s proposal to set up an investor-state dispute settlement mechanism, which is incompatible with current Indian laws. This will allow EU investors to challenge the government in front of an international tribunal.
  5. Legal practices: Another sticking point is that the EU wants India to liberalise accountancy and legal services. This has met with controversy as India do not allow foreign lawyers and accountants to practice in India.

Way forward:

  1. Dialogue: India should make rigorous diplomatic efforts to come to a solution to outstanding issues through dialogue. Effort must be made to make the EU understand issues related to market access and visa.
  2. Lobbying: Lobbying in the EU must be emphasised in order to influence EU’s lawmakers. Diplomatic efforts through Indian diaspora and business lobby are needed.
  3. Stronger Trade ties: Brexit provides a fresh opportunity to India to strengthen its economic relationship with the EU through an India-EU free trade agreement (FTA).
  4. Foreign Direct Investments (FDI): Indian government has considerably liberalised the FDI regime in the country and there has been an increase in FDI inflows over the last two years. Further easing of FDI would attract more investors from the EU.
  5. Boost Immigration from India:The EU is experiencing a great shortfall in skilled manpower. Brexit would provide a new opportunity for India to push the EU for visa reforms.

India and the EU expect to promote bilateral trade by removing barriers to trade in goods and services and investment across all sectors of the economy. Both parties believe that a comprehensive and ambitious agreement that is consistent with WTO rules and principles would open new markets and would expand opportunities for Indian and EU businesses. Post-Brexit provides an opportunity for both to negotiate a balanced deal.

Print Friendly and PDF