India-EU Trade Talks: Need a full FTA, not ‘early harvest’

India and the European Union have once again embarked on an ambitious journey. Both understand the need for urgency in reaching their destination. But the path towards that end game remains a tumultuous one despite a new momentum in their bilateral engagement. This is a moment to seize and make the most of when it comes to India-EU trade ties and policymakers on both sides seem well aware of what’s at stake. Yet, few would be willing to bet even now that a free trade pact (FTA) can be reached without any glitches.

Last month, after a hiatus of more than eight years, India resumed negotiations with the 27 nation bloc on the long-in-the-making FTA, that involves agreements on trade, investments and Geographical Indications (GI). This first round concluded on July 1 and the next round is slated to begin in Brussels in September. The two sides are aiming for “broad-based, balanced, and comprehensive” negotiations “based on the principles of fairness and reciprocity.”

India and the EU started this engagement on trade as far back as 2007 but by 2013 it became evident that due to some fundamental disagreements on issues such as the movement of professionals and custom duties on items like automobiles talks won’t move forward. Since then, there has been widespread pessimism around this issue in New Delhi as well as in Brussels.

But the world in 2022 looks very different from the world in 2013. Nations are having to reassess their long-held assumptions in a fundamental manner. This is the age of deglobalisation and economic decoupling. Suddenly, trade is being looked at through a strategic lens than primarily through an economic one. India and the EU are ready to forge a new partnership which speaks to the issues of today and responds to the challenges of the 21st century. This also means relooking at the FTA and trying to find solutions to some of the longstanding disagreements.

For India, this is a time to establish its credentials as a reliable trading partner. The perception that it is difficult to do business with India has done great damage to its credibility as a rising power. Without adequate capabilities to attract other economic players, India will remain marginal to the global economic order. This is something that Indian policymakers seem intent on rectifying as the allure of China dims for the western nations. For the EU, China was the focal policy of attention for the last several decades as Brussels proudly proclaimed that it was not in the business of geopolitics. With China now being seen as a “systemic challenger” to the EU, there is a new keenness to build a robust partnership with New Delhi.

Read More at https://www.financialexpress.com/opinion/india-eu-trade-talks-need-a-full-fta-not-early-harvest/2592836/