EU Seeks Huge Duty Cuts On Auto, Wines In Its FTA With India.

The European Union has sought substantial reduction or even elimination of duties in export of its automobiles, wines and spirits to India as a "must have" in the free trade agreement being negotiated between the two sides.

While India's negotiators in the Commerce Ministry have received the necessary mandate from Prime Minister Manmohan Singh-headed Trade and Economic Relations Committee (TERC), they would like to have a trade-off between yielding on automobile sector and gaining extra EU market for Indian agriculture, sources said.

India and the 27-nation EU have been negotiating a comprehensive free trade pact, officially known as Broad-based Bilateral Trade and Investment Agreement (BTIA), since June 2007.

For further discussions on the pact, EU officials are coming to India tomorrow.

While several rounds of talks between officials of the two sides have been held, differences remain on the level of market sought from each other in different segments of trade in goods, services and opening of investments.

"Concessions if any, by India on auto components and machinery lines will be dependent on the agriculture package negotiations," a source said.

Indian automobile industry is opposed to any kind of duty cuts on imports from Europe stating that such a move will harm the domestic manufacturers which have made huge investments in the sector.

Besides, the domestic automobile industry has been citing India's FTA with Japan, which has given enough safeguard to the automobile sector. It has argued that two-sets of rule can not be applied for signing two FTAs.

On services, India has been seeking access to the European market for temporary movement of professionals and supply of services through technology as is done by the Business process Outsourcing.

However, the EU wants India to open financial sectors like banking and insurance; postal legal, accounting, maritime and, security and retail sector.

The negotiations for the agreement are expected to conclude by the end of this year.

The EU is India's largest trading partner; bilateral trade in 2009-10 aggregated to USD 75 billion.

Source : economictimes.indiatimes.com