What if I tell you that after more than 7 decades of being thrown out of India, European bloc has realised that it is impossible for it to sustain itself without us. You will get surprised. But, that’s true. European Union has started to court India. But, this time, they do not have to deal with a weak monarch. After the blockbuster success of WTO, Piyush Goyal will ensure that Europeans do not get more than the deserved headway in India.
India-European Union to resume negotiations
India and European Union will restart their negotiation about the trade treaty on 27th of June this year. Ther decision was taken after a meeting between Commerce Minister Piyush Goyal and Valdis Dombrovskis, European Commission’s executive vice president. During his interaction with the media, Goyal asserted that India is dedicated to terms of trade under which both India and EU would remain in a win-win situation.
Emphasizing that other than gain or loss, there is much more to take away from these kinds of agreements, Commerce Minister said, “All cards are on the table and we are coming with an open heart and an open mind… Agreements do not have to always be about gain or demands, I think agreements also have to be which is good for both negotiating teams and for the people,”
The long rope for India-EU trade
For the last 2 decades, India and European Union have been on a topsy-turvy curve when it comes to bilateral trade negotiations. The last time such a kind of negotiation took place was way back in 2013. It was the 16th and last round of failed negotiations around the Broad-based Trade and Investment Agreement (BTIA) which was started in 2007.
European Union wants India to come to terms with issues like FDI & market access, manufacture of generic drugs, greenhouse gas emissions, civil nuclear energy, farming subsidies among others. Additionally, Geographical Indicators and regulatory protection for investors are also thorny issues hampering the agreement.
What is stopping Investor’s protection agreement?
European countries want to invest heavily in rapidly increasing Indian market. But, they have some apprehensions around the regulatory environment in India. Other than the strict vigil which India has started to keep on foreign investments after the Galwan valley thrashing of China, fighting a legal battle in Indian Courts is also a thorny issue.
European investors want that any issue involving Indian government and EU should be subject to trial under international tribunal only. They have been wrongly communicated that Vodafone was harassed by Indian Courts. On the other hand, maintaining its dignity, India has asked the bloc to prioritise Indian Courts for any legal issue. More so, India has also conceded them some leeway by accepting their demands regarding international tribunal. The only condition is that investors should be first dissatisfied with Indian Court orders and international tribunals will be the last recourse.
Read more: In a royal snub to European Union, India takes the first step towards a free trade deal with UK
The nucleus of Geographical indicators issue
Recognising the origin of any famous product has been an age-old issue. In modern day and age, it has attained game-changing importance. A product having a Geographical indicator (GI) tag has more chances of getting a fair price and helps in increasing its forex reserve by means of exports. Currently, India and Pakistan are at loggerheads over the GI tag for Basmati Rice. If somehow Pakistan is able to get it from EU, then it will be a travesty of justice.
But frankly, it is not that easy for both countries. EU regulations on GI are designed in such a way that they favour only those products which are produced inside its territory. By September 2020, 3349 commodities produced inside Euro Zone had achieved the GI tag. On the other hand, only 35 of those originated outside the area could get it. India has asked EU to liberalise its regime, so that its trading partners such as India can also mutually benefit.
Read more: After US and India, the European Union now wants to destroy China’s BRI ambitions
Russian sanctions
Apart from the aforementioned bones of contention, Russia is also a key concern for European Union and India. Moral posturing by EU leaders have pushed them to such an extent that they seem to be ready to lose a big market for their biased principle of ‘saving Democracy’. That is why they are trying to force India for complying with their self-destructive Russian sanctions. Modi government has been dilly-dallying with them on the issue. However, India’s overt actions indicate that India won’t be accepting their demands.
Read more: Dear Shashi Tharoor, notice carefully – India has already taken a side in the Russia-Ukraine war
India won’t compromise its interests
The crux of the issue is that European countries want free access to Indian markets, while India wants to protect its interests first and then provide them some leeway. India’s concern is absolutely valid as free market without any rules and regulations will end up hampering India’s local industries. We have learned it from our more than 500 years of history, dealing with Europeans.
Fed up with all these, the Modi government had decided to do away with the already existing Bilateral Investment treaty with 23 countries of EU blocks in 2016. The EU had vehemently criticised this move and asked India to retain individual treaties. But, the Modi government refused to get browbeaten and maintained its stance. It insisted that any kind of future negotiations will be guided by the model BIT issued by the government in 2015.
Meanwhile, on one hand we kept sending individual European countries out of the fold, while on other India decided to engage in trade deals with countries like Australia, UAE among others. European Union being our third-largest trading partner, did not want to be left behind. And that is why it is down to its knees accepting to put our key concerns in negotiations. The credit for all this goes to one and only Piyush Goyal.
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