Modi, Merkel nudge FTA, sign a dozen agreements

Both leaders press for easing of bilateral trade, investment

May 30, 2017 10:17 pm | Updated December 03, 2021 05:06 pm IST - BERLIN

Strong ties:  German Chancellor Angela Merkel and Prime Minister Narendra Modi in Berlin on Tuesday.

Strong ties: German Chancellor Angela Merkel and Prime Minister Narendra Modi in Berlin on Tuesday.

India and Germany agreed on the need to resume free trade talks between India and the European Union soon, and signed a dozen wide-ranging but low-profile MoUs on the subjects of education, health, skill development and sustainability after a meeting between Prime Minister Narendra Modi and German Chancellor Angel Merkel on Tuesday.

“Prime Minister Modi and Federal Chancellor Merkel underlined their determination to ease bilateral trade and investment…They also reaffirmed their strong commitment to the EU-India Broad Based Trade and Investment Agreement (as the FTA is called) and their commitment to bring about a resumption of the negotiations at the earliest possible date. This would, inter alia, allow to establish provisions for the mutual protection of new foreign investments,” a joint statement issued in Berlin said, addressing an issue that has been raised repeatedly by businessmen in the European Union.

 

Talks in July

MEA officials said Indian and EU negotiators would meet in July this year and then in October for the EU-India summit in Delhi, in an effort to “take FTA talks forward.”

Investor protection

FTA talks had stalled after 16 rounds of negotiations in 2013. Since then bilateral investment treaties with Germany and other European countries have also lapsed. German CEOs, who met with Mr. Modi at a business lunch, said this had caused much “uncertainty” in the business relationship, as they were particularly worried about investor protection.

At €17.42 billion in bilateral trade (2016), India ranks 24th among countries doing business with Germany, a figure that grew very marginally from €17.33 billion in 2015. German FDI in India is also low, at just under a billion Euros in 2016.

“We clearly see the progress under your term…. But the cancellation of the India-German investment treaty makes it very difficult for investment especially by small companies from Germany, and we urge that you work on the conclusion of the EU-India FTA,” Hubert Leinhard, president and CEO of hydropower company Voith Gmbh, and president of the German business chamber APA, said, speaking in the presence of Mr. Modi and Ms. Merkel.

The Prime Minister, who spent several hours on Monday evening speaking to Chancellor Merkel at the official retreat of Schloss Meserberg outside Berlin, was accorded a ceremonial guard of honour at the German Chancery in Berlin on Tuesday morning.

After an hour of talks in the Inter-Governmental consultations, where he was accompanied by MoS (External Affairs) M.J. Akbar, Energy minister Piyush Goyal, Commerce Minister Nirmala Seetharaman, and Science, Technology and Environment Minister Harsh Vardhan, the two sides announced agreements on cyber policy, railway safety, and the training of Indian Skill Development Officers and Cluster Managers.

Mr. Modi said Germany has prime place in skilling India’s youth, adding that the two countries are “made for each other”.

“We are a country of 1.2 billion, with 800 million youth. Germany has the right expertise in engineering, manufacturing, and is excellent in innovations,” he said. Mr. Modi however, sidestepped questions on India’s “protectionist” economic policy and on whether India would maintain its Paris accord commitments if U.S. President Donald Trump pulled out of the climate change agreement. “The question is hypothetical at present,” the MEA spokesperson said.

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