- India and the European Union (EU) have been negotiating a free trade agreement (FTA), officially called a Broad-based Trade and Investment Agreement (BTIA) since 2007 but have not been able to conclude it because of differences in some important areas.
Issues with BTIA
- The key differences arise over the movement of professionals. India is demanding greater and liberal market access for its service professionals.
- India is also seeking data secure nation status by the EU. India is currently not among the nations considered data secure by the EU.
- On the other hand, the EU is demanding significant duty cuts in automobiles, wines, spirits and dairy products, and a strong intellectual property regime.
‘Data Secure Nation’ status
- The lack of ‘Data Secure Nation’ status form EU prevents flow of sensitive data, such as patient information for telemedicine, to India.
- The existing data protection laws in the EU (known as General Data Protection Regulation (GDPR)) allow such information to only flow into a country that has been designated as being data secure.
- The matter is particularly crucial as it will have a bearing on Indian IT companies wanting market access.
Why in News?
- Recently, Prime Minister Narendra Modi held talks with officials from the EU via video-conferencing.
- To revive talks on the BTIA that have been suspended since 2013, the two sides announced a “high level dialogue” between Commerce Minister Piyush Goyal and E.U. Trade Commissioner Phil Hogan to try and take the agreement forward.
- The two sides issued a five-year roadmap for the India-E.U. strategic partnership, a civil nuclear research and development cooperation agreement between EURATOM and the Department of Atomic Energy, a declaration on “resource efficiency and circular economy” to exchange best practices in a range of areas and the renewal of their science and technology agreement for another five years.
Significance of BTIA
- Trade with India formed under 3% of the E.U.’s global trade, which is far below what was expected of the relationship.
- Conversely, the E.U. is India’s largest trading partner and investor, and accounts for 11% of India’s global trade, while India is the E.U.’s ninth biggest trading partner.