India-EU trade cannot increase substantially until the Bilateral Trade and Investment Agreement (BTIA) between the European Union and India is negotiated, said Latvian Foreign Minister Edgars Rinkevics, expressing the hope that there will be movement on the BTIA when Prime Minister Narendra Modi visits Brussels in March this year.
“We know that there are many issues with free trade negotiations, but we need to give it a good try, one more time. Only if we have a comprehensive trade deal, there is a chance for improvement of trade figures,” Mr. Rinkevics told The Hindu in an interview, referring to potential for IT companies in Latvia to outsource business to India as well as recruit “skilled and talented” Indian professionals. Mr. Rinkevics discussed the issue in talks with External Affairs Minister S. Jaishankar on the sidelines of the Raisina Dialogue in Delhi this week.
Mr. Rinkevics is one of the longest-serving EU foreign ministers, and was in office when the EU-India trade negotiations that began in 2007, were suspended in 2013. Since then, despite several attempts by Brussels and New Delhi, the two sides have been unable to agree to revive the talks.
‘Growth has not stopped’
Striking a different note on the BTIA, EU Ambassador to India Ugo Astuto said that despite the hiatus in trade talks, trade between India and the group of 28 European nations has not stopped growing. The EU is India’s largest trading partner with about $108 billion trade in goods in 2018-2019, and $42 billion in services. It is also the largest source of foreign direct investment.
“The EU is in any case India’s biggest trading partner, so without the agreement we are growing trade. The WTO remains the mechanism for dispute resolution. We both believe in a global system with a level playing field, and we hope to continue to talk about the FTA,” Mr. Astuto said at an event on the sidelines of the Raisina Dialogue.
However, several EU countries are hampered in investing in India without an investment agreement in place, and officials now suggest that will be put in motion when PM Modi attends the India-EU summit in Brussels on March 13, which will be held after a two-year gap.
The date for the next summit, where Mr. Modi will engage with the new European Commission and Council leadership including EC President Ursula Von Der Leyen, was decided when the European Union High Representative Josep Borrell Fontelles met with the PM on Friday, said the officials.
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