Shared concerns over China’s Belt and Road initiative should push India and the European Union closer to resume stalled talks over a Free Trade Agreement, said German Envoy to India Martin Ney, indicating the issue of the FTA will be high on the agenda when Prime Minister Narendra Modi meets with German Chancellor Angela Merkel in Berlin next week.
Referring to the Belt and Road Forum that India boycotted earlier this month in Beijing, Mr. Ney said that while Germany and other European countries had joined the China’s infrastructure and connectivity project, they had refused to sign a trade document at the summit due to a lack of transparency in the negotiations.
“Our hesitation has been that there have been no consultations [by China]. While connectivity is not a bad thing, trade must follow free trade policies,” explained Mr. Ney.
“Since we have some common questions [about the Belt and Road project] in India and in Germany, this is a good reason why we should be able to sit down and discuss how we should do trade.”
Mr. Modi will travel to Germany for the fourth round of the bi-annual Inter-Governmental consultations on May 29-30, and is expected to announce a number of agreements after his meeting with Ms. Merkel.
The meeting will be followed by a lunch to meet business leaders at the Indo-German business forum, where officials say, concerns by German tycoons over the lack of a negotiated FTA are expected to be highlighted.
Mr. Ney’s comments are significant, as they not only suggest Germany would like to work with India to counter certain parts of the Belt and Road, which India has refused to join over sovereignty concerns, Germany is also making a strong pitch to India over completing the EU-BTIA (called the Bilateral Trade and Investment Agreement) that has been deadlocked since 2013, despite 16 rounds of negotiations.
Mr. Modi’s visit to the European Commission in April 2016 failed to bring about any agreement to even resume the talks that essentially broke down over high taxes, market access and India’s concerns over visas for skilled workers.
In the meanwhile, the India-Germany Bilateral Investment Treaty (BIT), one of 23 BITs with EU countries, lapsed in March this year.
Mr. Ney said Mr. Modi and Ms. Merkel will discuss cooperation in the Indian Ocean region and Africa, counter-terrorism and share views on the way ahead in Afghanistan. “India and Germany share values of democracy, rule of law, and a rule-based international order,” Mr. Ney told reporters.
