India to stay firm on Iranian oil imports at EU summit

India to stay firm on Iranian oil imports at EU summit

The India-European Union summit scheduled for February 10 here is expected to generate intense discussions on trade, carbon tax, US sanctions against Iran’s nuclear programme and its impact on oil supply.

The 12th summit of the Union will be led by Prime Minister Manmohan Singh for hosts India, while Herman Van Rompuy, President of the European Council, and Jose Manuel Barroso, President of the European Commission, will head the EU delegation. This is the first such summit being held in India after implementation of the Lisbon Treaty which provided for a more powerful European Parliament, among others.

The much anticipated free trade agreement (FTA) cannot be clinched during the summit as there is no unanimity on the issue yet. “Intensive negotiations on broad-based trade and investment agreement are on and progressing well. India is fully committed to a balanced agreement,” said an Indian official.

Negotiations commenced in 2007 were to conclude in 2011, but differences over the level of opening of the market came in the way of a Bilateral Trade and Investment Agreement (BTIA), the official name for FTA. However, India will raise the much debated EU Emission Trading Scheme (ETS), under which big-time emitters of carbon dioxide within the EU are obliged each year to remit emission allowances to the government.

“ETS is a matter of concern for India. It was raised by External Affairs Minister S M Krishna during the EU ministerial meeting in Bangalore last month. It will come up again during the summit,” the official added.

Other issues such as accelerating trade ties in times of economic downturn, global financial crisis, climate change, counter-terrorism, the situation in the Middle East and the Iranian oil issue are likely to come up during the talks.

With regard to Iran, India is expected to face pressure from the 27-member EU delegation to implement sanctions as Tehran is suspected to be developing atomic weapons under the guise of a peaceful nuclear programme.

But India has made it clear that Iran, which meets around 12 per cent of its oil imports, is far too important for its energy security and, hence, it will continue to buy Iranian oil.

With bilateral trade between the two sides on a high, the focus will be on ramping up economic ties as the European economies look anew at India, which is still growing at the rate of over seven per cent when the Eurozone is caught in a recession.

EU is India's largest trading partner with bilateral trade touching Euro 67.78 billion in 2010. EU accounts for 14 per cent of india’s foreign trade and 21 per cent of FDI.

The Indian stand on various issues was said to have been given a final shape at a meeting that Commerce Secretary Rahul Khullar held with officials of the Prime Minister’s Office (PMO) on Monday.