No Sign of EU-India FTA Talks Resuming, New High-Level Trade Dialogue Established

The issue of trade is of vital importance to the relationship as the EU is India’s largest trade partner, even after Brexit.

While the Indian and EU leadership affirmed the need for “balanced” trade and investment agreements and set up a new high-level trade dialogue, there are still no signs of resumption of talks on a free trade and investment protection agreement after the 15th India-EU summit.

The first virtual meeting on the platform of the annual India-EU summit took place on Wednesday, with Prime Minister Narendra Modi speaking with president of the European Council Charles Michel and president of the European Commission Ursula von der Leyen through video conferencing.

The joint statement issued after the meeting said that both sides “reaffirmed their commitment to work towards a balanced, ambitious and mutually beneficial trade and investment agreements, opening markets and creating a level playing field on both sides”.

The issue of trade is of vital importance to the relationship as the EU is India’s largest trade partner, even after Brexit. The European Union is also the largest source for foreign investment to India, at over $91 billion.

EU president Charles Michel also flagged this area as one which needs to be upgraded. “The EU is India’s largest trade and investment partner. But India represents only about 2% of EU external trade. This is clearly an area that offers impressive potential for significant future growth. We agreed to enhance conditions for traders and investors,” he said at a press briefing in Brussels.

However, talks for a free trade agreement have been suspended and there is still no sign that they will begin anytime soon.

When asked if there was any timeline for the trade agreement, Ministry of External Affairs secretary (West) Vikas Swarup told reporters, “There is no time frame set for the conclusion of the Bilateral Trade and Investment Agreement (BTIA) but both sides have agreed that the two ministers mandated to take the discussions forward should meet as early as possible.”

He was referring to the establishment of a new mechanism of a high-level dialogue at the ministerial level with the mandate to “provide guidance to the bilateral trade and investment relations and to address multilateral issues of mutual interest”.

“The High Level Dialogue will aim at fostering progress on the trade and investment agreements, addressing trade irritants and improving conditions for traders and investors on both sides as well as discuss supply chain linkages,” said the joint statement.

During the media briefing in Brussels, Von der Leyen hoped that the new dialogue would “advance things and promote our common interest in moving forward towards a free trade agreement”. But, she added, “we are not there yet”.

In the run-up to the summit, EU official sources had expressed scepticism about restarting talks, citing India’s strong “protectionist” trends.

Five documents were concluded during the summit – a joint political statement, a Roadmap to 2025, pact on research and development in civil nuclear energy, joint declaration on resource efficiency and circular economy, and five-year renewal for science and technology cooperation agreement.

The EU has welcomed an Indian proposal for a “connectivity partnership that is open, sustainable and rules-based”.

India’s ongoing border tensions with China featured in the talks, with Modi briefing his EU counterparts.

Prefacing his remarks by saying EU and China’s relationship is “complex”, Michel said, “Prime Minister Modi had the occasion also to inform us about the latest developments regarding this incident with China and we support all the efforts in order to maintain a channel of dialogue in order to find peaceful solutions”.

India and China have been locked in a military stand-off in eastern Ladakh since early May. Following the deadliest clash at the Line of Actual Control in 45 years, both sides have been involved in military and diplomatic talks to de-escalate the situation.

To a question on whether India was more strategic to the EU than China, Von Der Leyen stated that both countries were important.

“If you look at the topics we have with China and with India – common interest is the fight against climate change. China and India are very important if you want to be successful in the fight against climate change,” she said.

She noted that the difference between the two countries was that India and the EU were democracies. “We can relate to being democracies and defending our values,” she said.

The joint statement also reiterated that the EU-India were the two largest democracies, with shared principles and values of democracy. It also said that the two sides “affirmed their determination to promote effective multilateralism and a rules-based multilateral order with the United Nations (UN) and the World Trade Organisation (WTO) at its core”.

An important aspect of the “Roadmap to 2025” was the reactivation of the India-EU human rights dialogue, which is described as a “key tool to promote shared values of human rights and fundamental freedoms, and convene regular meetings to forge mutual understanding and discuss human rights issues – including women’s rights and empowerment and child rights”.

During the press conference, Michel said in answer to a question that the EU had raised the topic of the protests against the Citizenship (Amendment) Act with the Indian prime minister.

“In the EU parliament, it was an important topic in the last few months. We also had the occasion today to raise this topic with the prime minister. We trust the Indian institutions. We understand that the Supreme Court will have a role to play in order to assess this legislation,” he said.

[Source: The Wire]