Broad Based Trade and Investment Agreement (BTIA)

 

·       A free trade agreement between India and European Union (EU) had launched, officially called broad-based Bilateral Trade and Investment Agreement (BTIA).

·       The BTIA was proposed to encompass trade in goods, services and investments.

·       In June 2007, India and the EU began negotiations on a broad-based Bilateral Trade and Investment Agreement (BTIA) in Brussels, Belgium.

Significance

·       India and the EU expect to promote bilateral trade by removing barriers to trade in goods and services and investment across all sectors of the economy.

·       Both parties believe that a comprehensive and ambitious agreement that is consistent with WTO rules and principles would open new markets and would expand opportunities for Indian and EU businesses.

The negotiations cover

·       Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, Trade Defence, Government Procurement, Dispute Settlement, Intellectual Property Rights & Geographical Indications, Sustainable Development.

What’s the issue?

·       Negotiations have been languishing since 2013 when the talks collapsed over certain demands from the EU such as greater market access for automobiles, wine and spirits, and further opening up of the financial services sector such as banking, insurance and e-commerce.

·       The EU wanted labour, environment and government procurement to be included in the talks.

·       India’s demand for easier work visa and study visa norms as well as data secure status, that would make it easier for European companies to outsource business to India, were also not received enthusiastically by the EU countries.

Trade relation between India and EU

·       India-EU trade relations are backed by the Cooperation Agreement on Partnership and Development signed in December 1993, and the EU-India Strategic Partnership launched in 2004. Annual Summits further strengthen it. An improved agreement with India is seen as a vital component of the EU’s Global Strategy for enhancing EU companies’ global competitiveness.

·       According to the latest Eurostat report, the EU is India’s third-largest trading partner by far, accounting for 11.1 % of India’s total external trade below China (12 %) and the USA (11.7%). At the same time, India is the EU’s 10^th largest trading partner, with 1.8 percent of total trade in 2020.

·       Trade in goods between the EU and India increased by 72% in the last decade.

·       Trade in services between the EU and India reached €32.7 billion in 2020.

·       The EU is one of the important sources of Foreign Direct Investment (FDI) for India. EU foreign direct investment stocks in India amounted to €75.8 billion in 2019.

·       Indian investors are also finding the EU attractive for investment and mostly concentrated in sectors like IT, professional services, manufacturing and automotive companies.

·       Some 6,000 European companies are present in India, providing directly 1.7 million jobs and indirectly 5 million jobs in a broad range of sectors.