INDIA- EU FTA on way-No Link with the Suspension of DOHA Round

November 08, 2006
By Additional Secretary, Department of Commerce

“There is a clear understanding that India and European Union is underway and failure of Doha round has no influence on them”. This was stated by Dr Rahul Khullar, Additional Secretary, Department of Commerce at an Interactive meeting on ‘Challenges and Opportunities from a Possible India – EU FTA’ organised by CUTS International in the capital today.

There is no causal link between Doha talk’s suspension and proposal to negotiate FTAs with European Union. This is just a co incidence that report of Indo EU High Level Trade group came immediately after Doha suspension, Dr Khullar added.

The FTAs are not just trade only agreements but have a geo political foundation. The contours of FTAs are much wider and stakes are not merely geo commerce. As the Agreements are entered into, there is much more to be gained by both the parties in terms of increased investment and trade.

This can work out as a win win situation for both as we are talking of broad basing trade and including goods and trade in services, TBT, SPS, Government procurements etc. This would however involve a mutual give and take from both sides, Dr Khullar added.

Speaking on the occasion, Mr Francisco da Camara Gomes, Head of Delegation of EC to India said that FTA with EU could be especially beneficial to India as presently, the EU trade with India is a meagre 1-2% of its total international trade. This leaves enough room for increased investment from EU in various sectors in India. At the same time, the investment from India to EU should also increase.

Mr Gomes clarified that the FTA is no substitute to multilateral negotiations under WTO but support them. It is just a measure to support the industry which can not wait for the WTO talks to reach satisfactory and logical end.

Mr Jim Rollo, Programme Director, SEI, University of Sussex, UK briefly gave an outline of the research project on the qualitative analysis of a potential FTA between EU and India being done jointly by University of Sussex and CUTS CITEE. The aim of the study is to assess the qualitative and sectoral aspects of the FTA and in particular to investigate more in depth the non tariff and regulatory issues regarding trade in goods and services and investment.

Earlier, Mr Pradeep S Mehta, Secretary General, CUTS in his welcome remarks said that there are various plausible reasons for entering into FTA with EU more because of the impasse of Doha Round. It would reflect the continued desire by countries to liberlise trade with key partners and also offer the opportunity to explore issues of deep integration.