The European Union (EU) is looking at a bilateral summit with India next month that would act as a catalyst for resumption of talks on the free trade agreement encompassing goods, services and mutual investment protection, according to a senior EU official.
PTI reported that talks on the Bilateral Trade Investment Agreement (BTIA), the official title of the pact, started in 2007 but have been marred by various flip-flops and disagreements. The discussions have remained deadlocked on issues like tariffs on automobiles and wines and spirits, EU trade officials said.
They hoped that the 14th EU-India Summit, likely in early October “will get the economic dialogue going as a precursor to relaunching talks on FTA”. The last summit on March 30, 2016, saw discussions focused on trade and investment, energy and climate, water, migration and foreign and security policy.
“Unfortunately, Indian policy has created major uncertainties for us because your government has taken policy decision to let bilateral investment treaties, which gave very clear rules, lapse,” said a senior EU official, who did not want to be named.
The 28 member states of the EU wanted the pacts to continue until they are replaced by EU-India FTA that would have had an investment chapter.
“Indian side thought it was wiser to let the bilateral investment treaties (BITs) lapse,” the official said, adding that EU investors, in many cases, no longer have bilateral investment protection.
The official said EU not just wants an FTA but “also an investor certainty created by provisions of treaty”.
The EU push for the pact comes amid many countries world over, including the US, questioning the system of free trade. The US has pulled out of the Trans-Pacific Partnership and has questioned the benefits of globalisation and free trade.
Expressing dismay over India’s decision to do away with bilateral investment treaties with its member states, the EU official said, “All the EU member states wanted to prolong these until it would be replaced by EU wide treaty with India in form of FTA, which would have had an investment chapter.”
On the expected deliverables of the EU–India Summit, another official said that besides joint declaration on climate change and clean energy, a likely one is on a partnership for smart and sustainable urbanisation — linking the EU’s Urban Agenda with India’s ‘100 Smart Cities Mission’.
European Investment Bank (EIB) loan for Bangalore metro development is also on the cards.
“The European Investment Bank which sits in Luxembourg, had in the last summit signed a major loan for Lucknow metro development. And I think now there will be new loans for Bangalore metro development,” an EU official familiar with the development said.
He declined however to specify the size of the new loan being negotiated. The loan is in the process of finalisation, the official added.