EU confident of early conclusion of trade pact post LS polls.

NEW DELHI: The European Union is hopeful of successful conclusion of the EU-India Trade and Investment agreement after the formation of the new government post the Lok Sabha polls due in April-May.

"I am optimistic about the prospects of the successful conclusion of the EU-India Broad-based Trade and Investment agreement (BTIA). We need to be looking at the formation of the next government for finalisation of this negotiation," Ambassador and Head of Delegation of the European Union to India Joao Cravinho said at an Assocham conference here.

"I would say just a few months after we take up negotiations with the new (Indian) government we should be able to conclude," Cravinho said.

The India-EU bilateral trade talk, formally known as the Broad-based Trade and Investment Agreement (BTIA), is stuck as the EU is not satisfied with India's offers in insurance, government purchases and market access for automobiles and wines and spirits.

The Insurance Laws (Amendment) Bill 2008, which seeks to raise FDI cap in the sector from 26 per cent to 49 per cent, is much awaited by global investors but has been pending for long in Parliament.

Meanwhile, Chairman of the Parliamentary Standing Committee on Industry K C Tyagi said free and preferential trade pacts have hit the domestic auto industry.

"India has signed about 30 per cent Preferential Trade Agreement (PTA), Free Trade Agreement ( FTA) and Comprehensive Economic Partnership Agreement (CEPA) with individual countries or regional blocks in auto majors. This has resulted in uneven and unfair competition faced by domestic industry," Tyagi said.

Asked about his Ministry's views on the proposed disinvestment in Bharat Heavy Electricals Limited (BHEL), Secretary in the Ministry of Heavy Industry and Public Enterprises, Sutanu Behuria, said: "The Department of Disinvestment will suggest and we have not yet received any formal communication letter from them".

Launched in June 2007, the negotiations for the proposed BTIA between India and the EU have witnessed many hurdles.

Both India and the 28-nation bloc agree that the BTIA will give a major fillip to the two-way trade as well as bolster the bilateral strategic partnership.

The EU side has been pressing for hiking FDI cap to 49 percent in the insurance sector. India has expressed its inability to do so without an approval from Parliament.

Besides demanding significant duty cuts in automobiles, EU is also seeking tax reduction in wines and spirits and dairy products besides a stronger intellectual property regime.

On the other hand, India is asking for grant of data secure nation status by EU, which will have a bearing on Indian IT companies wanting market access.

It also wants liberalised visa norms for its professionals and market access in services and the pharmaceuticals sector.

Source : economictimes.indiatimes.com