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ShareBangalore: The year 2009 could turn out to be a total contrast to the previous one as far as bilateral trade between India and the European Union (EU) is concerned.After registering a 37% year-on-year (yoy) growth to €77 billion in 2008, the global economic slowdown will result in flattish growth in bilateral trade this year, said a top official from the delegation of the European Commission to India.
The EU is India's largest trading partner, while India is the 10th largest trading partner for the 27-nation bloc. "Due to the recession, the early part of the year saw trade being impacted. Hence, we expect growth in bilateral trade to remain flat this year," said Edouard Bourcieu, first secretary, trade and economic affairs, delegation of the European Commission to India.
Bourcieu added that foreign direct investment (FDI) from the EU to India dropped significantly last year.EU FDI flows to India amounted to a mere €0.9 billion in 2008 compared to €10.9 billion in 2007, according to data released by the EU's statistical office - Eurostat.
According to Daniele Smadja, ambassador and head of the delegation of the European Commission, the Indo-European Free Trade Agreement (FTA) could be the right trigger for accelerating trade between the partners.
Industry body Federation of Indian Chambers of Commerce and Industry (FICCI) estimates that bilateral trade could touch $572 billion by 2015 if the deal is completed.
"Currently, we do five times as much trade with China as we do with India. The potential to do trade with India is much more and we hope to make quick progress with the FTA," said Smadja.
Smadja added that talks on the FTA are in progress but negotiation on tariffs has still not begun, which means the actual signing of the deal is some way off. "An Indo-EU FTA would particularly help businesses like textiles, leather, transport equipment, information services and metals," she added.
Negotiations for the FTA, which envisages eliminating duties on several goods and services, have been on since 2007. Seven rounds of discussions have not yielded much due to roadblocks on issues like intellectual property rights (IPR), competition, agriculture, market access and transparency.
