Cheaper wine to wait for India-EU deal.

NEW DELHI: The entry of cheaper wine and cars from Europe has to wait for India and the European Union to sort out their differences on a host of issues, ranging from bananas to visas and from investment to data protection for IT companies.

Sources told TOI that negotiators from India and the 27-member trading bloc are trying to narrow down the divergence in an attempt to clinch a bilateral trade and investment agreement by June. The proposed agreement has been in the works for 7 years now but appears to be several months away before it can be signed.

After all, consensus seems to have emerged only on non-agricultural market access and even there "a few small issues remain". On farm goods, however, the two trading partners have not been able to narrow down their differences with India seeking a reduction in customs duty for rice, sugar and bananas by the EU. On its part, the European countries want India to cut tariffs in some "sensitive sectors" such as whole milk powder, hard cheese and processed items, which New Delhi is reluctant to do due to "livelihood concerns".

For India, textiles, marine products and agriculture are the key interest areas while EU wants a reduction in import duty on automobiles, wines and spirits and machinery.

The other area where considerable progress is required is on services where only the first round of offers for opening up have been made, and even that, officials said, are below par. For instance, India has offered to give greater access to European financial services outfits, distribution services companies, telecom operators, maritime transport and air transport players. But EU wants India to open up legal services and accounting but there is little flexibility available to the government given that the two professional bodies are against any opening up, leave alone on a selective basis.

Besides, the European negotiators want the government to allow chains from the 27 countries to open retail stores in the country and also permit insurance companies to hold more than the permitted 26% FDI in Indian insurance outfits. Officials said, this is tough given the local concerns and would in any case go beyond the domestic regime. Officials pointed out that India's demands for a more liberal visa regime were not addressed, and were unlikely to be met given that each EU member had a different set of regulations.

Source : timesofindia.indiatimes.com