Brexit to hit India's talks for free trade pact with EU bloc.

New Delhi: India's negotiations with the 28-nation European Union for a free trade agreement (FTA) - which have been going on for a decade - are expected to get delayed and also impact talks for a similar deal with the European Free Trade Association (EFTA), which includes Iceland, Norway, Switzerland, and Liechtenstein.

Government officials said that India will have to rework its strategy, including the list of products on which duties will be reviewed by both sides as some of them would have been of interest to the UK, which intended to soon begin the exit talks with EU. "My interest will get changed because a number of tariff lines (products) will change (now). I will calibrate and the EU will also calibrate. Now they would reassess and we will also be going to reassess," commerce secretary Rita Teaotia told a news agency.

But it is bad news for exporters of products such as garments and agricultural products, as they were hoping that the comprehensive trade and investment agreement with the EU will be signed at the earliest. At the same time, a delay is reason to cheer for the auto industry and the spirits makers, given that EU was pushing for a sharp reduction in tariffs.

Although trade analysts said that the trading bloc would only resume the stalled FTA talks after settling Brexit fallout, the government was more guarded in its response.

"I would think, they (EU) would need time now to assimilate this outcome. Once they assimilate the outcome, they will only then respond...I will talk to my counterparts," said commerce and industry minister Nirmala Sitharaman.

Former commerce secretary Rahul Khullar said that negotiations are going to be difficult while another former Indian trade negotiator said that the FTA is as good as dead. "The agreement is now in jeopardy as you can't predict who is next to go. The game has completely changed as what EU minus UK will be is different - from talks on opening up of services or reducing duty on Scotch. It will be starting all over again," Khullar said.

While the government was keen to push ahead with talks with EFTA, a move that would have also put pressure on the EU, government officials said that the EFTA members have suggested that the dialogue be linked to the talks with the larger bloc.

Source : timesofindia.indiatimes.com