India is open to the idea of a preferential trade agreement with the EU in order to achieve faster results before developing a more ambitious free trade agreement (FTA) negotiated since 2007. First, there have been a number of lessons learned from the experience of our previous free trade agreements. In 2018, a NITI-Aayog note on free trade agreements reported india`s unrivalled and growing trade deficits as a result of free trade agreements with ASEAN, Japan and Korea. It is important that the deficit has also widened for India`s dominant value-added sectors, reflecting a deterioration in the quality of India`s trade with its free trade partners. The EU is India`s largest trading partner, accounting for 11.1% of India`s total trade, on an equal footing with the United States and China (10.7%) ». We are confident that free trade agreements with the EU and the US will benefit India and that talks will resume,” said Gopal Krishna Agarwal, national spokesman for the Bharatiya Janata Party for Economic Affairs. “India is not opposed to trade agreements with other countries, although now, it seems, after the release of the RCEP, the popular idea is that we understand the need to remain integrated at the global and regional level,” Agarwal added. “India and the EU have been in talks for some time on this broad trade and investment agreement,” he said. “But since 2013, these negotiations have not really taken place. Vietnam, which is becoming a huge competition for many economies, has already signed a trade pact with the EU. “The high-level dialogue will aim to promote progress in trade and investment agreements, address trade policy issues, improve conditions for distributors and investors on both sides, and discuss supply links,” he said in a joint statement after the talks.
“India cannot afford to have the Bombay Club that existed in the early 1990s, it is necessary to stay connected to other countries, including trade and economic cooperation,” said Sanjaya Baru, an economist and media advisor to former Prime Minister Manmohan Singh, previously. The Bombay Club was made up of renowned Indian industrialists who, in 1993, supported the process of economic liberalization in order to create protection and measures for a level playing field. At present, India`s trade regime and regulatory environment remain relatively restrictive. Technical barriers to trade (OTC), health and plant health measures (SPS), deviations from international standards and agreements, and discrimination based on India`s legislative or administrative measures affect a wide range of sectors, including goods, services, investment and public procurement. Fifth, it is essential for India to carefully select its new free trade partners.
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