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India-EU Bilateral Trade and Investment Agreement will boost trade in IT/ITes, logistics, energy, retail and professional services
Saturday, July 07, 2012
India-EU Bilateral Trade and Investment Agreement will boost trade in IT/ITes, logistics, energy, retail and professional services

New Delhi: India and the European Union (EU) are negotiating a broad-based Bilateral Trade and Investment Agreement (BTIA) and the services sector has emerged as an
important aspect in these negotiations. Indian Council for Research on International Economic Relations (ICRIER) has undertaken a study on ‘Enhancing Bilateral Trade, Investment and Collaboration in Services: India and European Union’ which focuses on assessing bilateral trade and investments in services, aimed at providing policy recommendations.

The study covers five services sectors of interest to India and EU- IT/ITes, logistics, energy, retail and professional services. The study examines the trade potential, investment prospects and collaborations in these services sectors, analyses the pattern of bilateral trade flows, barriers faced in each other’s markets and identifies areas for future cooperation.

FICCI, ICRIER and Konrad Adenauer Stiftung (KAS) today jointly organised a stakeholder consultation on ‘Enhancing India-EU Bilateral Trade, Investment and Collaboration in Services’ to discuss with the representatives of the five sectors the issues delaying the agreement. Dr. Arpita Mukherjee, Professor, ICRIER, made a presentation highlighting some of the key issues which require immediate attention of the stakeholders and policymakers of both India and the EU.

“When it comes to IT/ITes both India and EU have interest in this sector. But labour mobility restrictions in EU and the complex procedures to obtain visa and work permits in India are a deterrent. Also, the EU with its stringent data recognition policies does not recognize India as a data adequate nation which proves to be a hindrance,” said Dr. Mukherjee. She stated, “The logistics sector expects more investment, skill development and technology  transfer after the signing of BTIA. On the other hand both India and the EU face a shortage of fossil fuels, and India holds a defensive position in negotiations while EU has an offensive
position.”

Retail is a sensitive sector in India whereas EU is the demander. In India although there is 100 per cent foreign direct investment (FDI) in wholesale and single brand retail, FDI is still banned in multi- brand retail. It is proposed that multi brand should have 51 per cent of FDI.

Mr. Manab Majumdar, Assistant Secretary General, FICCI, remarked that there is huge potential for the five sectors - IT/ITes, logistics, energy, retail and professional services – to enhance trade and services between Indian and the EU. Once the BTIA comes into force it will pave the way for an exponential growth in trade for both India and the EU, he said.

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