Italian marines’ issue may affect India-EU trade ties.

NEW DELHI: Could the stalled India-EU Free Trade Agreement (FTA) have become a victim of the ongoing diplomatic tussle between India and Italy over the issue of Italian marines charged with the killing of two Kerala fishermen?

The ambassador of Germany - the EU's most powerful country -- Michael Steiner set many thinking on Monday when he said India and the EU could achieve better results in their relations if the Italian marines' issue was resolved smoothly.

The ambassador insisted that he was not drawing any link between FTA, or the bilateral trade and investment agreement (BTIA), and the marines even though he brought the proposed agreement up while answering a question about the marines.

"Think about FTA... I don't want to link this... we have to (can) come to better results if atmosphere is right," he said, while making his point that a result oriented approach was required to resolve the issue. The ambassador said Italy had taken a "realistic" position over the marines.

Steiner was talking to journalists about the state visit of German President Joachim Gauck starting on Tuesday. Steiner said it was in the interest of all three parties -- India, Italy and the EU -- that the matter was resolved smoothly. "We have so much to do here together," he said.

There have been serious rumblings in the recent past in the EU about the manner in which India has handled the marines' issue. Its industry commissioner Antonio Tijani recently tweeted, "Can we keep negotiating FTA India when death penalty is considered against EU citizens fighting sea piracy? I think not." The EU ambassador to India Joao Cravinho recently said the FTA with India could now happen only in the first half of next year.

The negotiations have remained stuck for years now and the EU has made up its mind that any substantial progress could be made only after the formation of a new government in India. The EU now seems to be focused more on signing the same agreement with the US and Japan.

The EU also urged India to find "as a matter of urgency" a mutually satisfactory solution to the case in accordance with international law and UN conventions on the law of the sea saying that the issue had a bearing on the global fight against piracy.

The government has invoked anti-terrorism law SUA (Suppression of Unlawful Acts Against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf) Act which entails death penalty. The EU has said capital punishment was out of question as there was already a commitment from India to that effect, referring to foreign minister Salman Khurshid's statement in Parliament.

The EU wants India to increase FDI cap in the insurance sector to 49%. India will need an approval from Parliament to do this. The EU also wants considerable duty cuts for its automobiles. India, on its part, has been demanding a data secure nation status which is important for its IT companies.

Source : timesofindia.indiatimes.com