India and the European Union will hold the seventh round of negotiations over the proposed free trade pact in mid-February, which will cover matters related to services and investments after discussions on goods and public procurements in previous rounds, two people aware of the development said.
“Substantial progress has been made in 18 out of 23 policy areas during the sixth round, which was held from October 16-21, 2023. After the round, in the last three-four months, the two sides ironed out several differences and prepared the ground to start the seventh round of negotiations from February 19-23, 2024, in the Indian capital,” one of them said. The sixth round held 71 technical sessions, he added.
Chief negotiators of both India and the EU have discussed modalities to take up chapters for services and investment and subsequently officials have agreed to proceed further, a second person said.
The two parties are discussing a bilateral free trade agreement, an investment protection agreement, and a pact for geographical indications. Now they will discuss services and investment, they said, requesting anonymity.
The EU wants India to remove barriers of trade for its smaller firms, open up services and Indian public procurement market, which is being negotiated on the principles of reciprocity and equity while protecting interests of domestic micro, small and medium enterprises (MSMEs), the second person said.
MSMEs, agriculture and dairy are sensitive sectors for India and New Delhi would not open them up for European producers on the principle of equity, he said.
Although India is the world’s fifth largest economy, it is still a developing nation with significantly low per capita income compared to European countries. Reciprocal trade arrangements in sectors such as farming and dairy are not possible as Indian farmers are poor. For them farming is for subsistence rather than profit, hence the government is committed to protecting their interests, he said.
Unlike recently signed trade pacts with Australia and the United Arab Emirates, the proposed deal with EU is comprehensive both in terms of vastness (27 member countries) and scope (in terms of subjects under negotiations). It will naturally take more time, he said.
The trade and investment negotiations was launched about a month after Prime Minister Narendra Modi participated in the Leaders’ Meeting on May 8, 2021, at the invitation of the European Council’s President, Charles Michel. It was the first time that the EU hosted a meeting with India in the EU+27 format.
The trade negotiation was relaunched in 2022, along with separate negotiations for an investment protection agreement and an agreement on geographical indicators. The trade negotiations was launched in June 17, 2022, by commerce minister Piyush Goyal and European Commission executive vice-president Valdis Dombrovskis. The EU and India had first launched negotiations for a free trade agreement in 2007 before the talks were suspended in 2013 due to a gap in ambition, an EU statement issued during the relaunch said.
