The EU, which is India's biggest trading partner, has demanded deeper duty cuts in alcohol and automobiles, besides liberalisation of the intellectual property regime. Talks between the two sides have been going on for the past six years.
The committee, which includes Union ministers of finance, external affairs, commerce, agriculture, railways and the Planning Commission's deputy chairman, marks the negotiating space for the commerce department in all bilateral and multilateral trade pacts.
"Since India has already offered substantial duty cuts in industrial goods, including alcohol and automobiles, the TERC will take a call on whether more could be allowed," a government official told ET. "We realise that there is no end to demands from the opposite side, but we need to have a mandate to give some more so that we don't have to keep coming back to the TERC for wrapping up the negotiations."
The official said the committee will meet on November 2 to examine the issues on which the EU is refusing to budge and lay down the strategy for future negotiations. India hopes to make big gains in the services sector through the free trade pact, formally called the Bilateral Trade and Investment Agreement, as all EU countries have agreed to increase the number of business visas, although individual commitments are yet to be finalised. Labour-intensive sectors such as textile and leather, which suffer high tariffs in the EU countries, will also benefit as tariffs will be eliminated in most of the items once the pact is implemented.
Delhi is understood to have agreed to bring down duty on wine and whiskies by more than half from 150% to 40%, but it would apply on wines above the threshold level of $4 per litre and whiskies over $6 per litre. The EU now wants India to further reduce the threshold limit. In automobiles, although the EU is the only trade partner that has been offered duty cuts on fully built cars, it is now demanding more. Delhi has reportedly agreed to halve import duties to 30% apart from allowing 2.5 lakh cars at 10% duty.
"The TERC has to decide where we draw the line as far as flexibility goes. The interest of our industry can't be compromised for the sake of a trade pact, otherwise our losses would outweigh the benefits," the official added.
Intellectual property is another area raked up by the EU.
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1 Comment on this Story
Sushil Seth2954 days ago
India shall have to act professionally.There is enormous potential which needs to be tapped by both the sides.Give & take could not only break the unwanted barriers but the trade between both sides could increase many fold.India could attract huge investment in her overall development from EU.