Having failed to get any concession on fast-expanding Indian market for food products in the WTO talks, the European Union (EU) will push for achieving a similar objective in its bilateral negotiations with New Delhi on the India-EU Free Trade Agreement (FTA).
According to an EU official, Agriculture Commissioner Mariann Fischer Boel made her intentions clear last week in Brussels while interacting with European Agricultural trade experts.
“The Indian middle class is hungry for exciting food and drink experiences that go beyond Indian cuisine. And this middle class is growing at the rate of 35 million people per year in other words, by the population of a medium-sized European country,” Ms Boel had said.
She also revealed her negotiating strategy and preferences in the FTA that the EU and India intend to sign by end of 2008. “We have a much clearer idea of which issues to focus on in our FTA negotiations with New Delhi,” she said.
According to an EU official, when so many foreign companies are getting into strong position to increase their sales in India, the European food-processing firms would also “need a piece of the action.”
Tough stance
While the EU wants to benefit from the growing food requirements of the Indian middle class, Ms Boel warned the European trading partners not to depend on FTAs for seeking extra mileage after unsuccessful attempts in the WTO to reach any agreement. In a clear message of EU taking a tough stance against her trading partners, she said, “Don’t expect that the substantial concessions rejected in the multilateral framework can be won back in a bilateral deal. The European Union will never be able to offer as much in a bilateral deal as we were prepared to offer in the Doha Round.”
India and the EU had decided in October 2006 to sign a trade and investment agreement that would go beyond a traditional FTA.
Negotiations will soon begin at the official level and in the initial stages, the two sides would exchange their wish-lists, broadly spelling out items they would like the agreement to cover. The actual list of items on which duties would be reduced to zero would be exchanged in October, sources said.
India would like the agreement to cover 90 per cent of trade, which was 40 billion Euros in 2005. In the services agreement, India will press for liberalisation of outsourcing norms and movement of professionals.
Apart from trade in goods and services, the agreement would also deal with non-tariff barriers and lay down rules on issues such as investment and competition.