The EU and India will stimulate talks on a trade agreement

The EU and India intend to resume long-standing negotiations on a comprehensive trade agreement while deepening economic ties and trying to respond to China’s rise.

The two sides could announce as soon as Saturday the resumption of negotiations that were suspended in 2013 amid disagreements over car parts tariff rules and the right to free movement for professionals.

Restoring talks between the world’s two largest economies has risen as a priority for both sides in recent months, as China’s rise and the state-backed models of capitalism and the economic damage it causes are counterproductive. through the coronavirus pandemic.

The move was debated by European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modik in a call on Monday morning, according to a senior committee official.

If the Commission does not find resistance at the last minute with New Delhi or EU member states, the resumption of talks will be announced at the EU-India virtual summit in Porto on Saturday. “There is optimism, but no agreement has been reached,” an Indian government official said.

With the resumption of trade talks, Brussels and India intended to negotiate a special investment pact and an agreement to protect regional specialty foods, the commission’s senior official said. There are also two sides at work to improve their infrastructure connections.

“This is a clear impetus to strengthen our strategic relationships in trade, digital, climate change and multilateralism,” Von der Leyen wrote after Monday’s call on Twitter. “I was encouraged by the opportunities to increase our trade and investment relations.”

The new impetus comes at a time when the UK is working to secure its trade agreement with India.

Between 2007 and 2013, the EU and India reached an agreement on previous agreements. Problematic issues include India’s reluctance to facilitate access for EU lawyers and open its market to European auto parts. New Delhi was frustrated by the EU’s unwillingness to offer its professional service providers more generous rights to work in Europe.

“It’s a difficult country to negotiate because they’re pretty protectionist,” said David O’Sullivan, former European Commission chief trade officer. “They tend not to make massive liberalizing trade agreements. If we look at what they’ve done, it’s not what we would call deep and comprehensive. “

O’Sullivan said the EU would have a “first strategic advantage” in reaching an agreement. “We would do a first block to end comprehensive TLC. That’s in itself a reason to look at all the specific issues [in the talks] with a bit of context, ”he said.

Officials believe that the options for an agreement more than 10 years ago are more beneficial as they look for ways to respond to China’s growing economic power in the Indian region. New Delhi last year decided to include 15 other countries, including China and Japan, in a region economic cooperation.

“This has changed,” the committee’s senior official said. “We see geopolitics changing,” he added, adding that there was now more “political impetus” behind the talks.

The senior official said the progress of the talks will depend on measures to build confidence in Indian parties to enter the market, including smoothing the movement rights of European professionals to visit Indian production plants.

“I hope if they restart there is reason to be optimistic that the deal can be closed,” O’Sullivan said. “It would send a positive signal to the global community and the India-Pacific strategy.”

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