India seeks tariff, non-tariff barrier reduction in EU deal

NEW DELHI: India has pitched for easing of mobility rules in the European Union under the proposed trade deal, while also seeking lowering of non-tariff barriers, along with duty cuts to ensure that exports from the country actually benefit, instead of getting stuck in a maze of complicated rules and standards that the trading bloc is known to erect.

Besides, govt sources said the demand for easier investment rules should be seen as a package with relaxing norms for services trade. During meetings with Indian officials led by commerce secretary Sunil Barthwal last week, EU, which has been negotiating a trade deal with India for more than a decade, was seen to be more understanding of India's stand.

In return, the EU has sought deep reduction in import duties in India, insisting that free trade agreements signed by New Delhi, including the one with the European Free Trade Association, comprising Switzerland and Norway, should not be the benchmark for talks, a senior official said.

While the EU is seeking "higher ambition" on tariff cuts, govt is unlikely to offer dairy and agriculture, given that Brussels too has sensitivities in the sector. But sectors, such as automobiles and manufacturing goods, could see some action, sources indicated.

"There is greater understanding for the need to converge on issues, which is a positive signal. If we can move towards narrowing down the gaps, then the engagement will move up," said a source.

The Indian side, which included chief negotiator Satya Srinivas, pointed to the recent increase in visas by Germany to argue that India could provide skilled workers to European countries at a time when they are dealing with an aging population. Although country-specific announcements are being made, govt has suggested an EU level move, which could be part of the services package.

Sources said there was greater appreciation of measures, such as the carbon border tax adjustment mechanism that the EU has proposed, while admitting that the hard and binding obligations that have been proposed on sustainability are a challenge for a developing country like India.

Given that India and EU revived FTA talks around two years ago, the two sides assessed the progress after nine rounds and with some broad understanding of positions, the next dialogue is expected before March.