European and Indian business leaders on Thursday backed a broad-based trade and investment agreement that is expected to be approved at the EU-India Summit on Friday.
A High-level Trade Group constituted last year to explore ways and means to deepen and widen bilateral trade and investment relationship had recommended a trade and investment agreement to be negotiated between India and the EU.
This recommendation is to be considered formally by the political leadership at the seventh EU-India Summit on Friday.
European Union Trade Commissioner Peter Mandelson told the EU-India Business Summit on Thursday that services, non-tariff barriers and rules on investment should be part of the new bilateral trade agreement.
Mandelson acknowledged that it may not be a smooth ride all the way. “There will be sensitive issues on both sides. But I am convinced that removing barriers to trade will attract new investments and make it easier for both EU and Indian businesses to operate across borders," he said.
A European Commission official said the EC will need to receive a negotiating mandate from the 25 member states. If these internal procedures are completed, negotiations could begin in 2007.
CII president R Seshasayee said Indian and European CEOs had asked the government leaders to complete negotiations within one year and the fine print of the implementation of the agreement within 4-5 years. The CII president also referred to consensus among the business leaders that bi-lateral and multi-lateral agreements should be full of content and not loose or a mild agreement.
"An EU-India agreement would have to be deep and substantive, not just goods, but services, non-tariff barriers and rules on issues such as investment, competition and public procurement as well," Mandelson said.
Commerce and Industry Minister Kamal Nath said the intention was to have wide-ranging talks with Europe, which accounts for an impressive one-fifth of India's trade. But as Prime Minister Manmohan Singh put it, it was far below the potential that existed.
Singh is looking at doubling the level of trade with Finland over the next one year and trying to sell India as a safe and profitable destination for investment to European business leaders, preferably in high technology and infrastructure sector. EU exports goods and services worth nearly Euro 25 billion to India; that accounts for less than 2 per cent of EU exports.