Twitter
Advertisement

No headway on range of issues: 'India - EU summit failed to achieve desired results'

Last week, Donald Tusk, President of the European Council, and Jean Claude Juncker, President of the European Commission, held day-long talks with Prime Minister Narendra Modi.

Latest News
article-main
Dr Martin Ney
FacebookTwitterWhatsappLinkedin

The recently concluded India and the European Union (EU) summit, touted as a major success, failed to achieve the desired results. German Ambassador to India Dr Martin Ney on Monday admitted that there was no headway on a range of issues particularly to resume Free Trade Agreement (FTA) negotiations. 

Last week, Donald Tusk, President of the European Council, and Jean Claude Juncker, President of the European Commission, held day-long talks with Prime Minister Narendra Modi. The summit, hosted by India, discussed foreign and security policy, migration, trade, climate, research, and innovation.

“There was no decision to resume negotiations for free trade and investment protection. The EU summit failed to do so and day before yesterday (Saturday) the EU leaders and Prime Minister Modi failed to resume negotiations again,” the German Ambassador said while inaugurating India-Germany media dialogue. 

Germany has been insisting both the EU as well as India to conclude the FTA and investment protection talks as the German businessmen are constrained when investing in India. The India-Germany bilateral investment treaty expired last year in March. As a result, the existing investments from India into Germany or Germany investments into India will be protected for next 15 years. 

The new investment, however, will have no cover until a fresh treaty is concluded. 

While India wants to negotiate treaties bilaterally, the countries have entrusted EU the responsibility of concluding the trade treaties. German companies have invested Rs 53,000 crore in India since 2010. Currently, there are 1,800 German companies operating in India.

Sources here said that while EU leaders wanted the FTA on top of agenda, India was more eager to discuss issues related to counter-terrorism and security. The EU, for the first time, named three globally proscribed terrorists – Hafiz Saeed, Zaki-ur-Rehman Lakhvi and Dawood Ibrahim in the joint statement issued at the end of the meeting. Saeed and Lakhvi are accused in the 2008 Mumbai terror attacks case while Dawood is an accused in the 1993 Mumbai blasts case. 

Although PM Modi, while mentioning India’s commitment to working together with the EU to deepen trade and investment ties, skipped the proposed FTA at the joint press conference, the European leaders were quite vocal about it. They said that the two-way trade that reached $95 billion in 2016 can be boosted further by implementing the FTA.

In December 2015, India cancelled all bilateral investment treaties, replacing them with Bilateral Investment Promotion and Protection Agreements (BIPAs) and future investment treaties. This was done after the country was being dragged into international arbitration by foreign investors who sued it for discrimination, citing commitments made by India to other countries in bilateral treaties. The BIPA, approved by the Cabinet, excluded matters relating to taxation, and clauses such as most favoured nation (MFN) and also narrowed down scope of national treatment, and fair and equitable treatment clauses.

Taking lessons from multinationals like Vodafone Group Plc and Sistema dragging India to international arbitration, citing treaty violations, the bilateral investment treaties were cancelled. In one case, an Australian investor cited a favourable substantive MFN provision in the India-Kuwait bilateral investment treaty (BIT) that he said was absent in the India-Australia BIT. The Australian company, which argued for including the provision in the India-Australia BIT, won the case in 2012. The experts, here, however, argue that BIPA is still a model document still to be negotiated and agreed by foreign governments.

Why both nations need the fta?

  • The India-Germany bilateral investment treaty expired last year in March
  • As a result, the existing investments will be protected for next 15 years
  • But the new investment will have no cover until a fresh treaty is concluded

 

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement