By June 20, 2013 Read More →
FTA Negotiations with India Snag Over Procurements and Automobile Duties

FTA Negotiations with India Snag Over Procurements and Automobile Duties

The European Union and India are in the final stages of their negotiations concerning a free trade agreement which began six years ago, in 2007. While certainly on its way to becoming more tightly integrated into the global economy, India still has a number of restrictions and economic barriers in place which make it difficult for foreign firms to gain competitive access to the market. In 2011, trade between the EU and India was valued at nearly € 80 billion euros.

The Broad-based Trade and Investment Agreement, or BTIA, has currently hit a snag on the issues of automobile tariffs, concerns over preferential treatment in government procurement and the conferment of ‘data-secure’ status for India.

The EU has asked for duties on car imports to be removed completely. India has made it clear that eliminating tariffs is not on option and has  instead offered to reduce them to 10 percent for a particular number of vehicles. Once this limit has been reached, tariffs will be raised to 30 percent – a figure which is still considerably lower than the 60 percent they currently stand at.

Government procurements and contracts are a lucrative business, estimated to be worth some € 160 billion annually. The EU hopes to obtain a clear decision from India on which contracts will be accessible to European firms and how they will be treated during the bidding process. The Indian government is currently deliberating a bill that will ensure “transparency, wider participation and non-discrimination in government procurements.”

Data protection laws in the EU currently prohibit personal information from being transferred to foreign countries unless their laws are determined to be sufficiently protective. India’s IT industry will benefit enormously from data-secure status, as it provides numerous remote services which are in high demand in the West such as telemedicine. India has argued that, on the basis of its adequacy agreement with the US and the US’ safe harbour agreement with the EU, it deserves to be granted data-secure status. To date, the EU has granted only 8 countries data-secure status: Uruguay, Switzerland, Israel, Canada, Argentina, Guernsey, the Isle of Man and the U.S.

Read More:

http://zeenews.india.com/business/news/economy/small-gap-posing-difficulty-in-finalising-india-eu-fta-rao_77412.html

http://www.thehindubusinessline.com/industry-and-economy/no-trade-pact-without-assurance-on-govt-procurements-eu/article4830921.ece

India Pushes for EU Data-secure Status – PC World

http://europa.eu/rapid/press-release_MEMO-13-576_en.htm

http://ec.europa.eu/trade/policy/countries-and-regions/countries/india/

(Wikimedia Commons image courtesy of Bobby Roy)

Notes:
1. No trade pact without assurance on Govt procurements [!], The Hindu Business Line, 19.06.2013
No trade pact without assurance on Govt procurements [!], The Hindu Business Line, 19.06.2013

About the Author:

Sebastian Andrei is NABATAEANS’ editor for EU - Middle East Trade and Political Relations. He completed his undergraduate studies at the University of Vienna, where he majored in journalism with minors in political science as well as business and economics. Sebastian is responsible for reporting on the European Union’s external trade relations. He also writes about economic development and investment opportunities in Europe as well as about policy changes which affect the EU common market.

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