display

Porto (dpa) - The EU and India have agreed to resume the talks on a free trade agreement that were stopped in 2013.

"I'm looking forward to restarting the negotiations," said EU Commission President Ursula von der Leyen on Saturday at a video conference between the heads of state and government of the EU states with India's Prime Minister Narendra Modi.

They should also include discussions about an investment protection treaty and geographical indication protection.

"There are close ties between the EU and India, but also a lot of untapped potential," said von der Leyen.

EU Council President Charles Michel spoke of a “new chapter” in the strategic partnership.

display

With more than 1.3 billion inhabitants, India is the second most populous country in the world after China, but has recently only been the tenth largest trading partner for the EU.

In 2007, both sides began discussing a broader trade and investment agreement that also included more market access and fewer tariffs.

However, several disagreements such as Indian tariffs on cars and wine as well as labor market restrictions for Indians by the EU brought the negotiations to an end in 2013.

According to studies, the German economy in particular would benefit greatly from a free trade agreement between the EU and India. According to figures published by the European Parliament last year, the Federal Republic alone could expect a welfare gain of around 2.2 billion euros. According to the calculations, Germany is the EU member state in which the greatest increase in both imports and exports can be expected, with exports likely to rise faster than imports, but these will be made before the UK finally leaves the EU were created.

A study published by the Bertelsmann Foundation in 2017 even came to the conclusion that Germany could calculate with an annual gross domestic product of 4.98 billion US dollars (around 4.1 billion euros).

The big winners are likely to be manufacturers of motor vehicles as well as of machines and equipment, which could each increase their added value by more than 1.5 billion US dollars a year.

On the other hand, service providers as well as the textile and clothing industry are seen as losers, each with an expected minus of several hundred million dollars a year.

India has a clear competitive advantage in these areas - mainly due to lower wages.

display

The automotive and pharmaceuticals sectors are seen as major hurdles to concluding a free trade agreement. Those who import fully assembled cars to India ultimately pay a surcharge of between 60 and 100 percent of the new price, depending on the size of the vehicle. The EU would like to remove these hurdles in the long term. However, India saw this as a threat to domestic production right up to the end, also from foreign companies that - partly deterred by the high tariffs - have set up Indian locations.

In the pharmaceutical industry, there is a particular problem with intellectual property.

India's important industry for generics, i.e. imitation drugs, which come onto the market for less after the patent protection of original products has expired, is protected by very strict laws.

Despite patent protection, Indian courts can order that foreign corporations must issue compulsory licenses to Indian generic drug manufacturers.

Another law makes it difficult to extend patent protection for a drug even though the manufacturer has improved it in the meantime.

© dpa-infocom, dpa: 210508-99-518996 / 2

display

EU figures on trade with India

Statements by Ursula von der Leyen (May 8th, 2021)

Tweet from Charles Michel (May 8th, 2021)