Modi’s Europe tour: Will India’s FTA pragmatism bring EU out of its shell?
The wider trade and FTAs in particular are playing an increasingly important role in India’s diplomatic scene at a time when its benefits are being questioned in several capitals. Modi’s prime minister has shown a strong inclination to take advantage of the foreign sector to national economic growth.
It is therefore not surprising that even before reports in the negotiations on the CJPE (Regional Economic Partnership) has left the negotiations on the free trade agreement between India and the European Union (EU) began to appear. The problem is simple. The EU can really get out of its shell and move to an agreement. The context is provided by Brexit, prompting the UK to promote a trade agreement with independent India along with a contest for the EU and the victory of Mr Macron as president in France which would damage the island lobby in the EU.
It is these events that awaken the enthusiasm of an agreement when Prime Minister Modi leaves for a visit to Europe. Would there be significant progress in a free trade agreement with the EU? The six-day tour will begin May 29 with PM Modi traveling to Berlin, where he will meet with German Chancellor Angela Merkel. Special attention should be paid. The expectations of the FTA negotiations between India and the EU were high, even in the last trip of the PM in Brussels; Minister of Trade and Industry Ms Nirmala Sitharaman is also part of the delegation, but her counterpart did not attend the summit. In fact, later, the Minister tweeted. “In India We hope this discussion is resumed We wanted to resume as soon as possible, we want a conference.
As mentioned above, the environment has changed this time. European political leadership seems to be very open to the idea of a free trade agreement with India. The recent visit of Ms. Sitharaman Italy and an earlier visit by a delegation of Germany indications of political commitment. Given how other EU associations with the rest of the world were not too pronounced for the continent, there is a good indication that it would like to have deeper cooperation with India. But of course, there are concerns? Some of them are concerned about the EU as to whether wider integration with India would help their economies with the best of them grew by only 1.9%. The EU is concerned that currencies are so volatile, especially the euro? These are difficult questions, they make more significant because their bilateral trade with India has grown impressively. From US $ 55 billion in 2006 to US $ 96 billion in 2016. In these circumstances, we can examine the two specific areas of the FTA-eliminating stock.
Financial Services and Investments
The first is the proposed EU-India bilateral trade and investment agreement (BTIA). Since 2015, India has developed a new model in the BTIA, which includes a strong provision for fiscal risks in accordance with the laws of India. The new NAFTA negotiations must take these provisions into account for BTIA.
A related problem is banking, where conflicting positions have emerged. The EU has insisted that FDI liberalization is higher in retail and multi-brand insurance. However, even if the EU calls for the liberalization of India’s banking and financial sector and the opening of FDI in multi-brand retail trade, India has been bothered by the increased demand for market access mode 1 and Mode-4 (ie the movement of labor and people). None of them has made much progress so far.