India offers concessions on wine and automobile imports to restart trade deal talks with the EU. Government set to impose restrictions on non-essential imports, targetting China.
Renewed Vigour: To restart formal talks on a free trade deal, India has signalled its willingness to cut tariffs on wines and automobiles from the European Union (EU). But the latter has maintained that for any deal to materialise, concerns on investment protection will have to be addressed.
Background: Talks on the Broad-based Trade and Investment Agreement (BTIA) between the EU and India began way back in 2007. Despite multiple rounds of negotiations, talks hit a wall in 2013 and were stalled indefinitely.
However, in 2019, after New Delhi decided to not join the Regional Comprehensive Economic Partnership (RCEP), India approached the EU again to restart talks on the BTIA.
So, What's the Problem?: Brussels is apprehensive about India's commitment to protect European investors. As per the Indian government's Bilateral Investment Treaty (BIT) framework (issued in 2015), Brussels objects to the clause saying that if an investor-state dispute were to arise, a foreign investor can seek international arbitration only after all domestic legal routes have been exhausted. India contends this clause is needed to reduce chances of hefty fines from international tribunals; the EU fears investors' interests will be hurt by India's legal system, which it reportedly regards as slow and corrupt.
Is the BTIA Dead?: Not quite. Recently, the US imposed high import duties on some European products, including whiskies and wines. These are items that are much sought-after in India's growing middle-class. Ergo, New Delhi's offer of concessions on alcohol. BS
Barriers Across the Himalayas: India is set to impose stricter quality restrictions on 371 items by March. The proposed rules, to be framed in coordination with the Bureau of Indian Standards, will comprise non-essential items like toys, plastic goods, sports items and furniture. They are aimed primarily at narrowing the trade deficit with China.
Non-essential imports from China reportedly amount to ?4trn ($56bn) a year.
Out of the 371 items to be affected, 111 come under the Department of Chemicals and Petrochemicals, 68 pertain to the Department of Heavy Industries, 62 come under the Ministry of Electronics and Information and Technology, 61 under the Industry Department, 44 under the Steel Ministry and 25 under the Telecom Department. Livemint
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