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INDIA MAY TAKE FLEXIBLE APPROACH ON CONTENTIOUS ISSUES IN INDIA-EU FTA

Marking a shift from its initial hard line approach, India is likely to be flexible in dealing with 28-nation bloc of the EU regarding to tariffs on wine/spirits and automotive components. The negotiations of India-EU FTA which came to an abrupt stop after the Italian Marines Fiasco got back on agenda of the both sides and negotiations are set to restart.

India has already raised FDI in insurance from 26% to 49% which was one of the demands of the EU. EU wants customs duty on wines and spirits which are at 150% to be reduced to nil in five years. Considering last year majority stake acquisition by London based Daigeo of Bengaluru based United Spirits, India is likely to propose a differential duty structure, with high duty on low-cost wines and lower tariff on expensivewines. On spirits like whiskey, lower tariffs could be proposed if it is bottled locally.

The automotive sector is highly protected in India; therefore a more gradual approach could be taken. The proposal is to reduce duties on high tech auto components to bring down import costs for manufacturers, whereas low-tech maybe kept at existing levels. EU has been demanding to reduce customs duty on cars to zero which is currently 80% for small cars to 130% for luxury vehicles.

India will reiterateits long standing demand for more access to its professionals and labour mobility as specified under Mode 4 WTO GATS agreement. It is further seeking more market access for it agricultural, pharmaceuticals and textile products. Following the economic crisis EU has added sectorial safeguard clause under Mode 4 to bind its limit at 20%. One talks resume the agreement which will be EU first with a large emerging economy could be concluded with a year.           

 

The gLAWcal Team

Thrusday, 19 March 2015

(Source: Economic Times)

This news has been realized by gLAWcal—Global Law Initiatives for Sustainable Development in collaboration with the University Institute of European Studies (IUSE) in Turin, Italy and the University of Piemonte Orientale, Novara, Italy which are both beneficiaries of the European Union Research Executive Agency IRSES Project “Liberalism in Between Europe And China” (LIBEAC) coordinated by Aix-Marseille University (CEPERC). This work has been realized in the framework of Workpackages 4, coordinated by University Institute of European Studies (IUSE) in Turin, Italy.