Diplomatist Magazine Diplomatist October 2019

INSIDE EUROPE where India has not given unlimited access to EU banks and companies. Third, there are disagreements with regards to Intellectual property protection standards. The EU wants India to strengthen its intellectual property rights regime, for instance, with regard to pharmaceuticals. Indian legislation bans both ‘ever-greening’ of patents (extending the time coverage of patents just before they expire, through minor changes to the product) and the exclusivity of test data (protection of clinical trial data), saying they jeopardise the sale of low- priced generic drugs and chemicals in its territory. Fourth is the termination of bilateral investment treaties (BITs). India signed BITs with several Member States of the EU in order to protect investments. However, in 2016 India unilaterally decided to terminate BITs with 57 countries including the UK, Germany, the Netherlands and France scraping key protection for foreign investors. India decided to terminate the BITs in order to re-negotiate the old treaties on the basis of a new model text for BIT. The contentious issue is the Investor-State Dispute Settlement (ISDS) provision requiring investors to exhaust all domestic procedures before seeking international arbitration. The EU is opposed to the new ISDS provision and has urged India to extend the old-investment treaties by six months before resuming the BTIA talks. Apart from these issues, a major issue for India is to get recognised as a data-secure country by the EU; without such recognition, the ﬂ ow of sensitive data can be hindered, thus increasing operating costs for Indian businesses operating in the EU. However, given EU concerns over its regulatory norms and data-privacy standards it is unlikely that the EU will agree to this demand. Along with these, on the Indian side, there remain several apprehensions including, legally binding clauses on Human Rights, social and environment, as well as labour standards, where India as a developing country has diﬃ culty in complying. What Next for the India-EU Free Trade Agreement Since the time the negotiations have been stalled, India has come a long way in re-calibrating its economic sphere and has set itself a target of becoming a $5 trillion economy by 2025. India is pursuing its modernisation drive through various initiatives like Make in India, Digital India, Start- Up India, and Invest in India etc. It has presented itself as a reliable, responsible and up-coming economy. The European Union is fully aware of the potential that the Indian economy presents and the avenues it opens up for joint synergies. The potential of India was also highlighted in the EU’s strategy on India which was released in 2018. The strategy recognised India as one of the largest economies with an annual growth rate of around 7 percent and on its reaching the US$ 7.8 trillion economy by 2030. The strategy stressed on realising the untapped potential of trade and investment relations. The strategy paper states that India still has a “strong reliance on exports and inward investment, and reluctance to open up to imports”. “The EU will continue to encourage India to open up its economy to strengthen its international competitiveness, beneﬁ t from a better integration into global value chains, and increase its share in global trade, to bring it more in line with its growing share of global GDP,” it asserted. Therefore, resuming negotiations is crucial for both the partners because the EU is India’s largest trading partner and beneﬁ ts accrued in increasing trade volume would help both. It is also important as both India and the EU represents large markets and the demographic dividend which is in the favour of India can also help EU in the long run with the movement of skill labour and professionals. Also, increased market access would also help integrate the services sector thereby increasing the scope of cooperation and joint ventures. Although the contentions in the negotiations present a bleak picture, the re-starting the negotiations and eventual signing of the agreement would be beneﬁ cial to both the partners.  References: EU-India Trade, Department of Commerce, Ministry of Commerce & Industry, http://commerce-app.gov.in/eidb/ergn. asp, Accessed on 3 October 2019 India-EU Bilateral Brief, Indian Embassy, Brussels, 17 March 2018, https://www.indianembassybrussels.gov.in/pdf/ Revised_Brief_Unclassifi edmar19_2018.pdf, Accessed on 3 October 2019 EU-India Fact Sheet, EU Strategy on India, https://cdn2-eeas.fpfis.tech.ec.europa.eu/cdn/farfuture/ bKxeumPzObF8OEde6SrD5qWyKo9-suTMQp3ZZLfv93M/ mtime:1542703624/sites/eeas/files/eu-india_factsheet_ november_2018.pdf, Accessed on 3 October 2019 Bhaswati Mukherjee (2018), India and EU: An Insider’s View, (New Delhi: Vij Books) India and prospects for closer EU ties, Briefi ng, European Parliament, 2017, http://www.europarl.europa.eu/RegData/ etudes/BRIE/2017/608679/EPRS_BRI(2017)608679_EN.pdf, Accessed on 3 October 2019 Joint Communication: Elements for an EU strategy on India, European Commission and High Representative for Foreign and Security Policy, November 2018, Brussels, https://eeas.europa.eu/sites/eeas/fi les/jc_elements_for_an_ eu_strategy_on_india_-_fi nal_adopted.pdf, Accessed on 3 October 2019 *Author is Research Fellow, Indian Council of World Aﬀ airs. Disclaimer: The views expressed are that of the Researcher and not of the Council. Extraordinary and Plenipotentiary Diplomatist • Vol 7 • Issue 10 • October 2019, Noida • 55

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