The Hindu Business Line : EU hopeful of free trade pact with India next year

India-EU FTA negotiations started in 2007. With many compromises to be found, especially on the agricultural interests, the objective of doing the FTA by 2010 is a realistic one, say EC officials.

K.R. Srivats

Brussels, Oct. 13 The European Union is hopeful of entering into a “deep and proper” free trade agreement (FTA) with India in 2010.

The upcoming India-EU summit on November 6 will add impulsion to the FTA talks, a top European Commission (EC) official said here.

“We have inched closer. There is prospect that FTA will be done next year. The negotiations have made substantial progress,” said the official who did not wish to be identified.

Korea deal

Meanwhile, the EU is likely to begin, in the next few days, a full-fledged FTA with South Korea. This will be EU’s first FTA with an Asian country. The EU will also enter into a partnership agreement with South Korea along with the FTA.

“We have gone a bit more quickly with South Korean. The starting points of South Korea and EU were perhaps little bit closer than they were between India and EU. That is expected given the relative levels of development. In the case of Korea, it is not surprising, it went more quickly,” EC sources said.

India-EU FTA negotiations started in 2007. With many compromises to be found, especially on the agricultural interests, the objective of doing the FTA by 2010 is a realistic one, say EC officials.

Forthcoming summit

On the upcoming India-EU summit, EC officials said that the summit will take stock of the India-EU FTA talks. Besides climate change issues, the summit is expected to discuss the issues relating to the global financial meltdown. On November 6, there will also be a business summit including a CEO roundtable that is likely to focus on investment issues and technological cooperation.

“Our business people are chomping at the leash. I get the impression that they (business people) are also eager in India to get on with it. We should be doing better on the economic and trade front. The FTA will help that,” an EC official.

The EU is India’s largest trading partner accounting for about €77 billion in trade in goods and services in 2008. The EU accounts for 21 per cent of India’s total exports and 16 per cent of India’s total imports.

On the other hand, India accounts for 2.4 per cent of EU’s total exports and 1.9 per cent of the EU’s total imports.

The EU has been the biggest investor in India with cumulative volume of about €16 billion since 2000.