India-EU Negotiations Nearing A Breakthrough

European envoys in Delhi over the past few days have had their sights set on an ambitious goal: closing negotiations over the BTIA – Bilateral Trade and Investment Agreement – between India and the EU before the end of 2013. The talks, started in 2007, have only recently restarted after stalling out when differences outweighed opportunity. The agreement in question is a more substantial iteration that includes investments from regular free trade agreements that India recently signed with Japan, Malaysia, and South Korea. The BTIA would notably improve economic relations, which at the moment are significant but still not good enough, in constant growth but have not yet reached a level fitting the dimensions of the two parties. The bloc of 27 European nations is already India’s biggest trade partner; bilateral trade has grown rapidly, from €29 billion in 2003 to €80 billion in 2011. The exchange of services tripled over the same period, as did European investment in the subcontinent. Some obstacles remain, rooted deep in the past. India has always looked to the united Europe with diffidence, preferring bilateral agreements and heavily favoring its historic ties with the United Kingdom. For its part, the EU confidence in India has always been conditional, wary that the frequent announcements of an opening market would remain just that, announcements. The conditions being asked of Delhi include the removal of tariff barriers, and new measures to aid access to India’s commercial services, banking, insurance, and financial sectors. A persistent aspect of negotiations with Europe is the improvement of environmental, social, and labor standards. The response so far has been ambivalent, but enough to convince Brussels to continue talks. India knows that competition with industrialized nations can be an insurmountable barrier to the development of industry and service sectors in an underdeveloped country. But India has no choice but to open its markets and improve itself, carefully calibrating its response to avoid relegating the country to underdevelopment or submission. In exchange, India asks for a reciprocal removal of trade barriers and, most importantly, a less restrictive immigration policy for its citizens – professionals, IT engineers, and young talents – who seek a springboard for their careers in Europe.