- 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 from the 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?
- India and EU have formally re-launched the India-EU Free Trade Agreement negotiations.
- This would be one of the most significant FTAs for India as EU is its second largest trading partner after the US. The India-EU merchandise trade has registered an all-time high value of USD 116.36 Billion in 2021-22 with a year-on growth of 43.5%. India’s export to the EU jumped 57% in FY 2021-22 to $65 billion. India has a surplus trade with the EU.
- India earlier this year has concluded FTAs with Australia and the UAE in a record time. The FTA talks with Canada and the UK are also underway.