As part of its policy to push for Free Trade Agreements with major trading partners, India has formally launched negotiations with the European Union for an ambitious and comprehensive FTA aimed at removing barriers across all sectors including investment and services.
The talks are being held in Brussels between high-level delegations from India and EU, led by Commerce Secretary G K Pillai and Director General of European Commission Davis O'Sullivan.
"EU and India expect to promote bilateral trade by removing barriers in goods, services and investment across all sectors of the economy. Both parties believe a comprehensive and ambitious agreement... Would open new markets and expand opportunities for EU and Indian businesses," an India-EU joint statement said.
It said the FTA would be consistent with WTO rules which say that regional preferential agreements need to cover substantial trade.
Sources said at the initial stage of talks both sides would exchange their wish-lists, broadly listing the areas they would like the agreement to cover. The actual list of items on which duties would be reduced to zero would be exchanged in October With WTO process stalled, India is following example of world's major economies like the US and EU by seeking trade expansion through the FTAs.
In the joint statement, the two sides reiterated their belief in the primacy of multilateral trading system and reaffirmed commitment to Doha Round round of negotiations.
While India has signed FTAs with Singapore, Thailand and Sri Lanka, negotiations are in advanced stages for similar pacts with Asean, Japan and Gulf Cooperation Council. Initial talks have started with China and Korea.
India and EU had decided to negotiate an trade and investment agreement in October last year at the EU-India Summit in Helsinki. The EU-India High Level Trade Group has been preparing the ground for these negotiations since October 2005 and its report will form the basis for further deliberation, the statement said.