India is conducting talks with the 27-nation European Union (EU) and is discussing the Trade and Investment Agreement between the two entities. Top Indian manufacturer Maruti Suzuki has urged the Union Government to keep automobiles out of the purview of this agreement, as it could adversely impact the country's employment situation.
Commenting on the proposed India- EU Free Trade Agreement (FTA), Rahul Bharti, Head of Corporate Affairs at Maruti Suzuki said, “Keep high value-add products like cars out of EU FTA as they have a huge multiplier effect for economy, employment and capability. ” This was mentioned at an event organised by Federation of Indian Chambers of Commerce and Industry (FICCI), while stressing upon the need to focus on increasing investment and not imports. Bharti further added, “Allow Indian SMEs to achieve global economies of scale which will make them globally competitive and give market access only against investment commitment in India.”
As per EU Chief Negotiator Ignacio Garcia Bercero, a lot of progress has been made in the India-EU FTA with respect to major issues, after which Marui expressed its concerns. He mentioned that the EU was aware of the importance attached to these talks by both entities. For this reason, he was willing to respect the considerations from both sides. On May 16, at a meeting with FICCI President Naina Lal Kidwai, he said, “The EU is ready to make an ambitious offer on Mode-4 if its critical interests in services are satisfied.” Further, he mentioned that issues with respect to cars and car parts, wines and spirits need to be nullified. On the other hand, FICCI emphasized the need to decrease the incidence of non-tariff barriers (NTBs).
Talks for trade and investment between India and EU have been on since 2007. However, a significant consensus has not yet been reached, due to discrepancies in major issues. It is hoped that in the current year, both parties will be able to look at each others' best interests and agree to the FTA that is mutually beneficial.
