The proposed free trade agreement between India and the European Union (EU) has hit another snag with both the law and home ministries ruling out opening up the legal sector to foreign players. While a political framework for an agreement is likely during the annual summit beginning February 10, a formal signing of the pact is not on the agenda.
The Bar Council of India, a statutory body that regulates and represents the legal fraternity, has also thrown its weight behind the two departments, official sources told The Indian Express.
The 27-member European Union is keen to explore the services market in India. The country offers huge business opportunities in legal, accounting, banking, insurance and retail services. India, on the other hand, is looking forward to mainly harnessing the potential in the IT and ITeS sector. It also is keen to send its doctors, nurses and chefs to the European countries.
Both India and EU are vigorously pursuing talks and want an early conclusion. The newly-appointed Ambassador of the European Union to India, João Cravinho, recently said that a “political framework” for an agreement could be agreed upon, if not the entire free trade agreement during the annual summit.
The bilateral investment and trade agreement (BITA), as the deal is proposed to be christened, will open up markets on both sides for trade in goods, services and investment.
The talks are on since 2007 and there have been 14 rounds of negotiations. Broadly, the trade agreement involves slashing of duties on over 90 per cent of the tariff lines and opening up mutual markets for services and investment. But contentious issues such as government procurement, market access, environment and services liberalisation are yet to be ironed out.
India’s exports to EU stood at $46.81 billion during 2010-11, up around 30 per cent over the previous year. This accounts for 18 per cent in India’s total export basket. Imports stood at $44.53 billion registering a growth of 15.89 per cent.
According to government officials, considerable progress has been made in talks relating to duties on pharmaceuticals, wine and automobiles.
But negotiations in services, agricultural products and government procurement have remained contentious. India is not a part of the WTO government procurement agreement, which has been signed by 41 of the 153 members.
India joined the WTO’s GP agreement as an observer in 2010, but has refused to be part of it. It has maintained that if it signs such an agreement with any nation, same terms and conditions would be available to other bilateral partners too. “But EU wants it in an agreement form. So that is where it is stuck,” the official said.
In the services sector, the position is as follows:
Accounting services: Official sources say the ministry of overseas Indian affairs has favoured opening up the sector to foreign players since persons of Indian origin (PIOs) and non-resident Indians are already practising in the country.
Banking and insurance: The issue awaits clarity because the Indian side is not comfortable with different business jurisprudence in each of the 27 nations. Here, India is likely to adopt a quid-pro-quo approach.
Courier service and contractors: Officials say that lack of integration in the legal and market segment in the EU is the main obstacle.
Source : indianexpress.com