Determinants and Impediments of The EU-India Bilateral Trade and Investment Agre-1

Determinants and Impediments
of the EU-India Bilateral Trade

and Investment Agreement: The Proof
of This Old Pudding Is in the Eating
Nicolas Köhler-Suzuki
1 Introduction1
In November 2004, the newly elected Indian Prime Minister Manmohan Singh visited
The Hague for the launch of the EU-India Strategic Partnership with European
Commission President Romano Prodi and European Council President Jan Peter
Balkenende. Economic issues were high on the agenda and both sides agreed to
‘facilitate and expand bilateral trade and investment flows’ (European Commission
2004: 3). In the fifteen years since, trade and investment flows have grown consid-
erably, with an increase of more than 72% in goods trade in the last decade alone.
Moreover, the share of total European outward foreign investment going to India
more than doubled from 8 to 18% during this period (European Commission 2019).2
But this growth happened in the absence of a bilateral trade and investment agree-
ment which both the EU and India had proclaimed to be the next step in the bilateral
relationship. It was not for lack of trying. Trade talks for a comprehensive bilateral
economic agreement between the EU and India started in earnest in June 2007 and
went through twelve formal rounds of negotiations, as well as numerous technical
meetings (Nataraj 2016). Yet by mid-2013, both sides had run into seemingly irrec-
oncilable differences. Negotiations ground to a halt and no formal negotiations have
1 This chapter is adapted from the author’s forthcoming doctoral dissertation on India’s trade
agreements at the University of Cambridge. The author thanks Gisela Müller-Brandeck-Bocquet,

Ignacio García-Bercero, Philipp Gieg, Pallavi Kalita, Timo Lowinger, Manuel Pietzko, Anja Zürn
and the participants of a workshop on EU-India relations at the University of Würzburg in November
2019 for helpful comments on an earlier draft. Any errors that remain are the author’s sole
responsibility.
2 For an up to date insight into the bilateral economic relations also see Sangeeta Khorana’s chapter
in this volume.
N. Köhler-Suzuki (B)
International Trade Intelligence, Paris, France
e-mail: nicolaskoehler@gmail.com
© The Editor(s) (if applicable) and The Author(s), under exclusive license 151
to Springer Nature Switzerland AG 2021
P. Gieg et al. (eds.), EU-India Relations, Contributions to International Relations,
https://doi.org/10.1007/978-3-030-65044-5_8
152 N. Köhler-Suzuki
taken place since, in spite of occasional signals that indicate an interest in resuming
discussions.3 What could explain the long duration of these negotiations, unusually
drawn out even when measured against the protracted nature of other bilateral trade
negotiations? And in view of the differences that previously ended formal talks, why
does the prospect of restarting negotiations keep on returning, like a zombie that
refuses to die?
This contribution will recapitulate the genesis and development of the negotia-
tions for the EU-India Bilateral Trade and Investment Agreement (BTIA) to answer
these questions. It will present an argument grounded in the sui generis character
of the EU’s external relations and India’s idiosyncratic trade policy agenda. Unlike
the governments of most nation states, the European Union has exclusive compe-
tences for international trade, but lacks capabilities to meaningfully link trade with
other strategic objectives. For example, in spite of increased cooperation and coor-
dination under the EU’s Common Foreign and Security Policy, large member states
continue to conduct foreign policy bilaterally (sometimes even at odds with each
other). Negotiations for the EU’s bilateral trade agreements have thus been largely
driven by commercial objectives that are closely in line with the market access agenda
of the European export industry. India’s drive for trade agreements, on the other hand,
involves a mix of foreign policy objectives and an abstract set of commercial inter-
ests—in the absence of substantial market access demands by Indian industry these
are frequently defined by the government. This chapter argues that the divergent
approaches to trade agreements taken by the EU and India have made it more diffi-
cult for both sides to come to a zone of possible agreement in their negotiations. From
the very beginning, it has put the European Union into an offensive position, to which
the Indian side responded with lacklustre demands from its exporting industries and
a strong defensive position in many other sectors to which the EU requested market
access. In contrast to other Indian trade agreements, where the Indian government
has been willing to make trade-offs and bring negotiations to a conclusion in order
to achieve other objectives, the lack of a strategic nexus with the EU meant that
negotiation roadblocks couldn’t be overcome.
The chapter will proceed as follows: First, it will look at the determinants of
the BTIA by providing context for the opening phase of the negotiations in the
mid-2000s, in particular in regard to the bilateral, minilateral and multilateral market
access strategies pursued by the European Union and India during this period. Second,
it will look at the impediments that were encountered by both sides during the nego-
tiations. Third, it will conclude and provide an outlook for the future prospects of
BTIA negotiations.
3 See,
for example, the Joint Statement from the EU-India Summit on 6 October 2017, which
promised to “to re-engage actively towards timely relaunching negotiations [sic] for a comprehensive
and mutually beneficial Free Trade Agreement” (European Commission 2017).
Determinants and Impediments of the EU-India … 153
2 Background to the Start of the BTIA Negotiations
When the EU and India started exploring the possibility of a bilateral trade agreement
in the mid-2000s, both sides came to the table with somewhat contrasting experiences
of regional economic integration. The Indian government had started to enter into
a series of bilateral and minilateral trade agreements in the late 1990s. This was a
significant turn away from previous government policy, in which India had primarily
negotiated international trade commitments in the multilateral setting.4 India signed
agreements with Sri Lanka in 1998, Afghanistan in 2003, the South Asian Free Trade
Area (SAFTA) in 2004, the Southern Common Market (MERCOSUR) also in 2004,
Singapore in 2005 and Chile in 2006.5
The agreement with Sri Lanka was India’s first bilateral trade agreement in forty-
eight years. But within the Indian government, the shift to signing a bilateral trade
agreement was controversial. According to senior government officials who took
part in the discussions in the mid-1990s, opinions between and within government
ministries on whether or not to pursue bilateral trade agreements over minilateral
integration in South Asia and multilateral negotiations at the World Trade Organiza-
tion (WTO) were strongly divided from the mid-1990s to the mid-2000s.6 On the one
hand, it had been a key foreign policy objective of various Indian governments since
the 1980s to more closely integrate South Asia through the South Asian Association
for Regional Cooperation (SAARC) process in order for Indian industry to compete
in a world perceived to be fragmenting into regions, and to establish Indian hegemony
in its own neighbourhood. But regional economic integration in South Asia was held
up by the simmering conflict between India and Pakistan (Batra 2012). Minilateral
trade talks that started in 1991 under the SAARC’s Preferential Trading Arrangement
(SAPTA) liberalised as little as ten percent of intraregional trade flows by the late
1990s (Weerakoon 2010: 918). For some within the Indian government, bypassing
Pakistan with a network of bilateral agreements was an opportunity to take a step
towards integrating India more closely with its neighbours.7 Against this backdrop,
the Indian government entered talks in June 1997 to establish closer economic ties
4 India had been one of the founding signatories of the General Agreement on Tariffs and Trade
(GATT) in 1947. According to the WTO’s Regional Trade Agreements Database, the only other
trade agreements India signed under GATT Article XXIV until the late 1990 s were with Bhutan in
1949, Nepal in 1950, the United Nations (UN)-led Asia Pacific Trade Agreement (APTA) in 1975
and the SAARC Preferential Trading Arrangement (SAPTA) in 1993. India was also a signatory
of the Global System of Trade Preferences amongst Developing Countries (GSTP) in 1988 under
the GATT’s enabling clause. All of these agreements are shallow by contemporary standards and
liberalised only a limited number of tariff lines.
5 The India-MERCOSUR agreement only came into force in June 2009.
6 Muchkund Dubey (former Indian Foreign Secretary) in discussion with the author, 27 March 2017.
7 Leela K. Ponappa (former Indian Ambassador to Sri Lanka and Deputy National Security Advisor)
in discussion with the author, 21 April 2017.

with the BIST-EC group (Bangladesh, India, Sri Lanka, Thailand—Economic Coop-
eration), albeit at that point without negotiations for a minilateral trade agreement.8
For many Indian officials, regional economic integration with India’s immediate
neighbours was still the only legitimate reason to deviate from a multilateral frame-
work; a further fragmentation of the international trading system, they argued, would
only benefit more powerful countries—to the detriment of India.9
The debate was ultimately resolved in a somewhat haphazard manner. At a polit-
ical summit for the 10th anniversary of SAARC in July 1998, Indian Prime Minister
Atal Bihari Vajpayee reiterated India’s interest in concluding a South Asian Free
Trade Area (SAFTA), but at the same time offered still to move forward with bilat-
eral trade agreements so as to integrate more quickly with willing partners in South
Asia.10 This offer came much to the surprise of officials in the Ministry of Commerce
in Delhi, who had been unaware of the last-minute initiative by Ministry of External
Affairs (MEA) officials.11 Sri Lanka was the first country to accept the offer, not least
because it did not benefit from the additional trade preferences that India had granted
under the SAPTA agreement to Least Developed Countries.12 Within just five months,
Prime Minister Vajpayee signed a bilateral trade agreement at a summit meeting in
Colombo in December 1998 with Sri Lankan President Chandrika Kumaratunga.
The Indian objective for this agreement had been primarily strategic, rather than
commercial.13 Following years of civil war, including the contentious involvement
of Indian troops, India had tried to bring a Sri Lankan government already well-
disposed towards Delhi closer into its orbit. Although a number of think tank studies
at the Research and Information System for Developing Countries (RIS) and under
the auspices of the prominent Sri Lankan economist Lal Jayawardene had advocated
closer economic integration throughout the 1990s, the agreement signed in Colombo
did not at this stage include any concrete commitments. Negotiations between Indian
and Sri Lankan trade officials only began after the announcement by Vajpayee and
Kumaratunga. Political lobbies for apparel, tea, rubber and spices mobilised resis-
tance in the following months, but the geopolitical impetus from the Vajpayee admin-
istration to come to an agreement overrode these concerns by March 1999 (Ponappa
2011).
8 Former advisor to the Indian Prime Minister (de-identified) in discussion with the author, 1
December 2014; BIST-EC was later renamed BIMSTEC and now also includes Myanmar, Nepal
and Bhutan.
9 Former member of the Planning Commission (de-identified) in discussion with the author, 27 May
2013.
10 Address by Atal Bihari Vajpayee, Prime Minister of India, Tenth SAARC Summit, Colombo, 29
July 1998.
11 Leela K Ponappa (former Indian High Commissioner to Sri Lanka and Deputy National Security
Advisor) in discussion with the author, 21 April 2017.

12 In July 1998, all members of SAARC, except for Pakistan and Sri Lanka, were classified as Least
Developed Countries (LDCs) by the United Nations.

13 Former Indian High Commissioner to Sri Lanka (de-identified) in discussion with the author, 13
November 2015.
The India-Sri Lanka agreement served as a blueprint for many of India’s trade
negotiations in subsequent years. It included an early harvest scheme, a comparatively
long timetable for the phase-in of tariff reductions, a long sensitive list and restrictive
rules of origin (Seshadri 2009). Negotiations for SAFTA continued in the years
following the bilateral agreement with Sri Lanka, but were only concluded in 2004.14
The bilateral agreement with Sri Lanka opened the door for the negotiation of
bilateral trade agreements outside of South Asia. This process also tended to be first
and foremost driven by foreign policy objectives and only later included commer-
cial export interests (although these were mostly identified from the top down and
lacked meaningful input from domestic industry). Following the 2001 invasion of
Afghanistan by the United States, India signed an agreement with Afghanistan in
2003 to provide preferential market access to the fledgling new government. The
agreement can be seen in the light of India’s commitment to counterterrorism,
regional stability and its rivalry with Pakistan (Pant 2012).15 Similarly, the India,
Brazil, South Africa Dialogue Forum (IBSA) is a political platform that followed
the participation of the three countries as observers of the G8 summit in Evian,
France (1–3 June 2003), during which Atal Bihari Vajpayee, Luiz Inácio Lula da
Silva and Thabo Mbeki felt slighted by not having a full seat at the high table of
international relations, which fuelled their desire to create an anti-hegemonic bloc
(Stuenkel 2015). In the trade domain, this contributed to the formation of the G20
developing nations group in the lead-up to the September 2003 WTO ministerial
conference in Cancún, which was the first significant roadblock in the multilateral
Doha Development Round (Narlikar and Tussie 2004).16 It furthermore led to the
start of minilateral negotiations with MERCOSUR (17 June 2003) and the Southern
African Customs Union (SACU) (17 July 2003), as both Brazil and South Africa
were members of customs unions in their home regions (cf. All Africa 2001).17
While the supporters of an exclusively multilateral trade policy (outside of South
Asia) had a strong position within the Indian government prior to 2003, the reluctance
from developed countries at the Cancún ministerial conference to make significant
market access concessions brought back fraught memories from the conclusion of the
Uruguay Round, in which developing country coalitions fractured.18 Bilateral trade
agreements had first and foremost been advocated throughout the 1990s by govern-
ment officials in the MEA and affiliated institutions like the RIS, keen to deepen
14 SAFTA entered into force in 2006.

15 India later successfully campaigned to include Afghanistan in SAARC and SAFTA.
16 South Africa had been seeking trade agreements with India (and other large developing countries)
as early as February 2000, amidst rumours that this would serve as a negotiating device to create
outside options and therefore leverage during negotiations for a trade agreement with the European
Union, and also for multilateral trade negotiations (Reuters 2000; The Hindu 2000).
17 In the case of SACU, tentative discussions started with South Africa in July 2001 and were
only later expanded to include other SACU members; former Ambassador of India to the WTO
(de-identified) in discussion with the author, 10 December 2014.
18 Former member of the Indian Planning Commission (de-identified) in discussion with the author,
27 May 2013.
Indian foreign policy agendas like the ‘Look East’ policy and ‘South-South Cooper-
ation’.19 On the other hand, more and more countries, including New Zealand, Oman
and Singapore began to approach India with demands for bilateral trade negotiations
in the early 2000s. India, with much higher bound tariffs than most of the prospective
partners, was reluctant to respond (The Economic Times 2000). But by 2002/2003
a bilateral trade agenda had become the official position of the MEA, as indicated
by a note from the Ministry of External Affairs to the Commerce Minister and the
Finance Minister on the merit of bilateral trade agreements.20 This position won out
henceforth, as the government began to enter a number of bilateral and minilateral
trade negotiations.
In May 2003, the Indian government accepted Singaporean overtures to begin
bilateral trade negotiations. Association of South East Asian Nations (ASEAN)
countries, especially Singapore, had throughout the 1990s been seeking to balance
China’s growing economic strength with closer ties to other countries in the region,
including India. This was illustrated by former Singaporean Prime Minister Goh
Chok Tong’s analogy of India and China as the two wings that lift an Asian jumbo
jet.21 China had proposed a Free Trade Area with ASEAN in November 2000 and
ASEAN cautiously responded to the offer to begin negotiations (New York Times
2000). India, on the other hand, had also been trying to become more closely inte-
grated into the ASEAN framework. Brajesh Mishra, the powerful National Security
Advisor to Prime Minister Vajpayee was instrumental in India’s positive response to
Singapore. He argued internally for the potential of investments from the financial
hub and the possibility of leveraging the relationship with Singapore for closer ties
with the rest of ASEAN.22 Against this backdrop, and in the immediate aftermath of
the failed September 2003 Cancún WTO ministerial conference, India entered bilat-
eral and minilateral trade negotiations with Thailand and ASEAN in October 2003
(Financial Times 2003a). Moreover, India also held preliminary talks with Australia
and Chile in the spring of 2004.
By the time the EU and India launched the EU-India Strategic Partnership in
late 2004 and announced their intention to deepen economic integration, India had
thus already embarked on a course of signing bilateral trade agreements. After
taking office in 2004, the new Manmohan Singh government established a Trade and
Economic Relations Committee (TERC) to keep track of all the different incoming
demands. Although the government of India remained largely passive, the main
impetus for India engaging in negotiations continued to be foreign policy objec-
tives. Trade agreements worked as a convenient diplomatic signalling device, but
there was still reluctance from the Ministry of Commerce to engage in the agenda
19 Nagesh Kumar (former Director-General of RIS) in discussion with the author, 5 December 2014.
20 Former Indian Minister of External Affairs (de-identified) in discussion with the author, 10
September 2015.
21 Keynote Address by Goh Chok Tong at the Singapore Conference, London, 15 March
2005, https://www.mci.gov.sg/pressroom/news-and-stories/pressroom/2005/3/singapore-is-the-glo
bal-city-of-opportunity?page=206; for ASEAN counterbalancing strategies cf. Storey (2000).
22 Former Ambassador of India to the WTO (de-identified) in discussion with the author, 10
December 2014.
and perhaps even more importantly a lack of commercial export interest from Indian
firms.23 This resulted in agreements that were either shallow (e.g. Sri Lanka, SAFTA,
MERCOSUR) or with small trading partners (Singapore, Chile) and can also help
to explain India’s complicated and long bilateral negotiations with ASEAN (lasting
until 2014 for the signature of the services part of the agreement) and with SACU
(still ongoing).
In contrast, the motivation for engaging in trade agreements was strikingly
different for the European Union during the mid-2000s. In the 1990s, 12 EU member
states integrated their economies and policies more closely than ever before. More-
over, the EU continued to expand, with two waves of accessions in 1995 (Austria,
Finland and Sweden) and 2004 (Eastern Europe). While the establishment of the
Single Market was at least in part the result of economic competition between North
America and Europe during the 1980s, it also created new competitive pressures for
the rest of the world (Mansfield and Milner 1999). At the same time, the end of
the Cold War and the ‘unipolar moment’ for the United States and its allies in the
mid-1990s catalysed the Uruguay Round and the establishment of the WTO in 1995
(VanGrasstek 2013). Developed countries, including the EU, tried to include the
so-called Singapore issues (government procurement, trade facilitation, investment,
competition) in multilateral negotiations from 1996 onwards, but ultimately failed
against the resistance of a coalition of developing countries, most notably during the
2003 Cancún ministerial meeting (Woolcock 2003). The EU had previously issued
a moratorium on negotiating new RTAs in 1999—which was intended to facilitate
negotiations at the multilateral level—but between 2003 and 2007 slowly shifted its
policy position to allow for new agreements (Woolcock 2007).24 Most of the EU’s
earlier trade agreements were primarily motivated by political logic, such as the
Euro-Med Association Agreements (with Algeria, Israel, Jordan, Lebanon, Morocco
and Tunisia) for checking migration flows and creating political stability as well as
agreements with former European colonies of the African, Caribbean and Pacific
Group of States (ACP)—Lome, Cotonou, South Africa and CARIFORUM—for the
promotion of economic development (Woolcock 2007). As late as November 2003,
the European Commission was still publicly expressing doubt about the possibility
of a trade agreement between the EU and India (Press Trust of India 2003; Financial
Times 2003b). But with the outcome of the multilateral Doha Round looking increas-
ingly dire and with the United States and Japan beginning to engage in a bilateral
trade agenda, the European Commission started signalling openness to the idea of a
bilateral Free Trade Agreement (FTA) with India in mid-2004 (Press Trust of India
2004a). At the same time, the Commission also began pursuing the Global Europe
Strategy, published in 2006, which in contrast to the EU’s earlier trade agreement
23 The exception to this is the Confederation of Indian Industry (CII), which was an early advocate
of bilateral trade agreements for market access, in particular for textiles (Press Trust of India 2002;
The Hindu Business Line 2002).
24 Although the EU did not enter into any new RTAs between 1999 and 2007, it did conclude
bilateral negotiations that were started before the moratorium with Mexico (July 2000), South
Africa (January 2000), the Caribbean Forum (CARIFORUM) (2003), Tunisia (1998), Morocco
(2000), Israel (2000), Jordan (2002), Lebanon (2003), Egypt (2004), and Algeria (2005).
asked the EU to look for FTAs based on economic criteria, in particular ‘market
potential measured in terms of size and economic growth [and] the level of protec-
tion vis-à-vis exports from the EU’ (European Commission 2006).25 Based on these
criteria, the Global Europe Strategy specifically identified ASEAN, South Korea,
India, MERCOSUR, Russia, the Gulf Cooperation Council and China as priorities
for new trade agreements.
The failure to resolve disagreements on agricultural subsidies in the June 2006
‘Green Room’ meeting in Geneva between Australia, Brazil, the European Union,
India, Japan and the United States, led to the suspension of the multilateral Doha
Round (Blustein 2009: 223–234). It was no coincidence that the Global Europe
Strategy was published only shortly thereafter in October 2006 (Financial Times
2006a).26 Moreover, by this time interest from other OECD countries in beginning
negotiations on a trade agreement with India had also come into focus. In partic-
ular Japan, an economic competitor of the EU in key industries such as automobile
exports, was one step ahead of the European Union in gaining access to the Indian
market and had set up a bilateral Joint Study Group for economic partnership as
early as November 2004. The start of negotiations for a bilateral trade and invest-
ment agreement between the EU and India in June 2007 should therefore also be
seen against this backdrop.
3 The Inception of the BTIA Negotiations (2005–2010)
The September 2005 EU-India summit in Delhi operationalised a number of commit-

ments that were made during the EU-India Strategic Partnership the prior year. The
EU and India agreed on a joint action plan, which mandated the launch of a High
Level Trade Group (HLTG) to explore the potential for negotiations. The experts of
the HLTG met five times in 2006 and presented a final report to political leaders at
the October 2006 EU-India summit in Helsinki.27
Both sides underlined their commitment to multilateralism and the successful
conclusion of the Doha Round, even though at this point its dire straits had become
obvious. The HLTG report noted that the EU was India’s largest trading partner and
25 The Global Europe Strategy emerged at least in part due to a political pressure campaign from
business groups, in particular by the European business association Union des Industries de la
Communauté Européenne (UNICE) and the European Services Forum (ESF) (cf. Corporate Europe
Observatory 2008).
26 Even though the 2006 suspension of the multilateral Doha Round was mostly due to disagreements
between the United States and India, the EU and India had in prior years frequently found themselves
on opposite sides in multilateral negotiations, including on environmental and labour standards in
trade, the so-called Singapore issues, agricultural subsidies, NAMA and TRIPS. Any bilateral
negotiation on these issues would therefore be difficult from the outset.
27 Report of the EU-India High Level Trade Group to the EU-India Summit, 13 October 2006;
the European Parliament during this time also voiced its support for a bilateral trade agreement
(Financial Times 2006b).
emphasised the large number of English speakers in India that enable services exports
and facilitate investment in India, in particular for outsourcing, linking cross-border
value chains and accessing India’s substantial consumer market. It also pointed to a
potential problem that did indeed arise later in the negotiations, namely that 77% of
India’s exports to the EU in 2004 were already granted duty-free or preferential treat-
ment under the EU’s Generalised System of Preferences (GSP). Any bilateral trade
agreement would therefore have to address the remaining 23% to set strong incen-
tives for India or make substantial concessions in the services sector.28 Conversely,
in spite of India’s deep economic reforms during the prior two decades, its average
bound most favoured nation (MFN) tariff rate of 30% was then still amongst the
highest in the world, which would generally make a WTO-compatible RTA (freeing
‘substantially all trade’) a lopsided exercise in favour of EU exports.29
Bilateral trade in goods at the time was growing at 20% per annum and had reached
EUR 40 billion. The analysis of the HLTG showed that EU goods exports to India
were predominantly in intermediate products, in particular precious stones and gems,
machinery and electrical equipment, base metals, chemical products and vehicles.
India’s most important exports to the EU, on the other hand, were both primary prod-
ucts and finished goods, in particular textiles and clothing, precious stones and gems,
machinery, agricultural products and leather materials.30 Not mentioned in the report
was that despite the extensive preferences already granted to India by the EU, one
incentive for India to come to an agreement was particularly strong: India had already
graduated in 2001 from GSP preferences for some of its most important exports to the
EU, such as textiles and clothing. Moreover, by the end of 2004 there were significant
pressures from the phase-out of the successor to the multi-fibre arrangement (MFA),
the transitional Agreement on Textiles and Clothing (ATC) (The Hindu Business
Line 2000).31 Indian exports of textiles to the EU dropped substantially in the mid-
2000s and lost market share (Hoda and Prakash 2011). Competitors like Bangladesh
were granted duty-free treatment under the Everything But Arms preferences for
Least Developed Countries, which created strong competitive pressures for Indian
textile and clothing exports to the EU.32 In the services sector the HLTG report also
foreshadowed some of the key concerns that were to appear in negotiations in the
28 This was behind the dismissal by key economic policy makers of a 2000 proposal by the Confed-
eration of Indian Industry for a bilateral trade agreement between the EU and India (Press Trust of
India 2000; The Hindu Business Line 2004).
29 The World Bank warned in December 2004 that India had a ‘penetrating interest’ for exports in
business process outsourcing, services, textile and auto components, for which market access could
best be achieved in multilateral negotiations (Press Trust of India 2004b).
30 The intra-industry trade for precious stones and gems is mostly related to cross-border value chains
in jewellery manufacturing. This also corresponds to a September 2005 survey by the industry body
ASSOCHAM, which found interest for an FTA with the EU from the Business Process Outsourcing
and IT Industry, as well as amongst biotechnology and pharmaceutical firms (The Hindu Business
Line 2005).
31 60–70% of Indian textile exports at this point were to the EU and US, and in the EU these faced
duties from 4.5 to 13% (The Hindu Business Line 2007a; The Hindu 2007b).
32 Former Head of International Trade Policy at the Confederation of Indian Industry (de-identified)
in discussion with the author, 9 December 2014.

following years. It outlined the growth in India’s information technology services,

and the EU’s leadership in accounting, legal and financial services, both areas that
would become sticking points. Bilateral trade in services was growing at 10% per
annum, with a slightly greater share for Indian services exports. Lastly, the report
showed that the investment relationship between the two sides was lopsided. While
the EU was India’s main source of foreign direct investment (FDI) with EUR 1.1
billion of investments in 2004 and EUR 600 million of Indian FDI in the EU in 2003,
the latter made up less than 1% of overall investment in the EU.
Based on this analysis, the HLTG suggested several potential fields of cooperation
for deepening the relationship through a BTIA. It proposed the removal of 90% of
duties (both for tariff lines and trade volume) within seven years of an agreement
coming into force.33 However, the report already anticipated the need for sensitive
lists and the possibility of a later review. Also targeted were regulatory transparency
for both goods and services, and the removal of non-tariff barriers (NTBs). Analogous
to trade in goods, to be compliant with the General Agreement on Trade in Services
(GATS), any potential RTA also needed to ‘ensure substantial coverage’ for both the
number of sectors included and the modes of supply. The report suggested that this
should be explored, for example, by mutual recognition of professional qualifications.
However, it also already noted the potential sensitivities of some services sectors,
which would also become problematic later in the negotiations.
In comparison to these ambitious proposals, the HLTG suggestions for the so-
called ‘Singapore issues’ (government procurement, investment, trade facilitation,
competition) were much weaker. This reflected Delhi’s reluctance to limit domestic
policy space and was related to significant contemporary opposition to ongoing
economic reforms. The EU had already clashed with India numerous times at the
multilateral level but envisaged deeper integration in a bilateral agreement. While
there were some HLTG proposals that went beyond, the majority only mirrored multi-
lateral commitments. On investment, it proposed national treatment of FDI. While
acknowledging the need to maintain policy space for domestic regulation, it still
suggested an agreement on transparent regulatory frameworks. The HLTG recom-
mendations on investment also highlighted linkages with services trade, such as free
movement of professionals related to investment. This too would become a difficult
area of the negotiations at a later point. On the topic of government procurement, the
report included only a remark that both sides should am for a ‘better understanding’ of
procurement practices, put in place measures to enhance transparency, and examine
opportunities for market access.34 On intellectual property, the report already high-
lighted the difficulty of finding a common denominator in the subsequent negotia-
tions, on the one hand proposing to include it in bilateral talks, on the other citing the
need to ‘respect national sovereignty’.35 For competition policy, the HLTG had only
relatively weak suggestions, such as the exchange of non-confidential information
33 This corresponds to the EU’s interpretation of the GATT requirement that RTAs free ‘substantially
all trade’.
34 Report of the EU-India High Level Trade Group to the EU-India Summit, 13 October 2006, p. 8.
35 Ibid., p. 9.
between competition authorities and coordination of enforcement. Lastly, the HLTG

proposed negotiations for a binding State-to-State dispute settlement mechanism.
Based on the recommendations of the HLTG, India and the EU officially agreed to
begin negotiations for a Bilateral Trade and Investment Agreement in October 2006 at
the seventh EU-India Summit in Helsinki with a proclaimed aim to finish negotiations
within two years. The EU remained hesitant and emphasised the potential negative
impact on multilateral negotiations. The Indian side, on the other hand, insisted on
keeping references to labour and environmental standards out of the initial negoti-
ating mandate (The Hindu 2006). On the sidelines of the meeting, Indian Commerce
Minister Kamal Nath specifically emphasised the export potential of agricultural
products, textiles, leather, gems and jewellery, inorganic chemicals, iron and steel as
well as the opportunities for investment, trade facilitation, transparency in regula-
tory frameworks, and investment-related movement of natural persons (Press Trust
of India 2006a; The Hindu 2006). The EU side emphasised its demand to open Indian
agricultural markets outside of the politically sensitive subsistence farming sector
(Press Trust of India 2006b). Given the perceived economic complementarities that
were identified, Commerce Minister Kamal Nath stated in January 2007 that ‘one of
the easiest trade agreements would be with the EU’ (Press Trust of India 2007a).
The European Commission’s Directorate General (DG) Trade started its consulta-
tion process in February 2007 with a questionnaire for industry on market access for
European goods and services in the Indian market (European Commission 2007).
That negotiation dynamics would later become particularly thorny around Indian
demands to obtain short-term visas for its services providers was predicted at the
time by the EU’s Director-General for Trade David O’Sullivan: ‘We appreciate that
the issue of free movement of professionals is critical for India and will also feature
in negotiations for FTA. […] However, there are some sensitives in Europe on Mode
4 which we will have to manage’ (Press Trust of India 2007b).
By March 2007, the two sides started stumbling over the EU’s insistence on
linking human rights and democracy into the bilateral agreement. Similar ‘essential
elements’ clauses had been in all bilateral EU trade agreements since 1995, but from
the very beginning of the BTIA negotiations India categorically ruled out such a
commitment. This was in line with its prior refusal in other international arenas to
link these issues to trade for fear of developed countries using linkages as hidden
forms of protectionism. European negotiators at that point in time indicated they
could move ahead in the negotiations without including the issue, given India’s
economic importance (Financial Times 2007). The same month, EU Agriculture
Commissioner Mariann Fischer Boel led a delegation of 28 food and drink companies
from the EU to India. In particular the producers of alcoholic beverages had been
closely watching the quickly growing but highly protected Indian consumer market.
The Scotch Whisky Association, for example, estimated Indian duties on whisky
were at a prohibitively high 525% (The Hindu Business Line 2006).36 EU Trade
Commissioner Peter Mandelson quipped: ‘There are potentially as many incipient
36 As would soon become evident, whisky producers play an important role in the political economy
of the UK. They are not only the third biggest industry in Scotland (behind energy and financial
alcoholics in India as anywhere else in the world and our job is to encourage them to
take the final step’ (Financial Times 2006c). EU Agriculture Commissioner Mariann
Fischer Boel summed up the trip with the observation that ‘the Indian middle class is
hungry for exciting food and drink experiences that go beyond Indian cuisine. And
this middle class is growing at the rate of 35 million people per year in other words, by
the population of a medium-sized European country’ (Press Trust of India 2007c).
Preparations in the capitals was also getting into gear. In May 2007 Commission
officials in Brussels would have their first meetings with business representatives to
discuss market access demands (Corporate Europe Observatory 2010: 12).
Negotiations for the BTIA were officially launched by Indian Commerce Secretary
G K Pillai and the EU’s DG for Trade David O’Sullivan in Brussels on 28 June 2007.
At this point, the EU had not yet given up on the future of the multilateral Doha
Round and was framing the potential outcomes of an agreement in this light. EU
Agriculture Commissioner Mariann Fischer Boel, for example, cautioned: ‘Don’t
expect that the substantial concessions rejected in the multilateral framework can be
won back in a bilateral deal. The European Union will never be able to offer as much
in a bilateral deal as we were prepared to offer in the Doha Round’ (Press Trust of
India 2007c).
On 1 October 2007, the second round of negotiations took place over six days in
Delhi. Prior to the talks, the United Nations Conference on Trade and Development
(UNCTAD) India, on behalf of the Indian Ministry of Commerce, had held a round
of six workshops across India consulting with industry to gauge export interests, and
initially identified 203 products for the sensitive list, which in the following months
increased to 340 (The Hindu Business Line 2007a; Press Trust of India 2007d). Key
items on the initial list were low-tech machinery (especially for textile production) as
well as rubber and articles thereof, vegetables, fruits and nuts (The Hindu Business
Line 2007b). Following demands from Kerala’s fishing sector, the government also
added sardine, mackerel, anchovy, cod, sole, skid-jack tuna and yellow-fin tuna (The
Hindu 2007a). In spite of earlier comments, EU negotiators now demanded the
inclusions of labour standards, which was rejected by the Indian side (Press Trust
of India 2007e). Both sides agreed to have long phase-in periods for some products
over ten years (Press Trust of India 2007f). A key demand from the Indian side
was a Mutual Recognition Agreement for professional certification, flexible Rules
of Origin and movement of people (Press Trust of India 2007g). The EU focused on
presenting demands on intellectual property rights, geographical indications, dispute
settlement and competition policy (Press Trust of India 2007h).
A third round of negotiations took place 6–12 December 2007 in Brussels. In the
weeks prior, the Confederation of Indian Industry and the Ministry of Commerce
had held further stakeholder consultations, and its negative list continued growing
to 401 items, now also including more varieties of fish, tea and coffee (Press Trust
of India 2007i). The EU, on the other hand, expanded its market access demands
on government procurement beyond the relatively narrow definition that had been
services), but are especially important for rural areas and would thus become a core UK demand
for market access in the negotiations (The Guardian 2015).
included in the HLTG (Press Trust of India 2007j). While the EU was still not willing
to compromise on non-tariff barriers and technical standards for agriculture imports,
or the inclusion of labour and the environment, Indian chief negotiator Rahul Khullar
nevertheless concluded that discussions had taken place with ‘seriousness, gravitas
and a forward movement’ (Press Trust of India 2007k).
In February 2008, negotiators met for a fourth round of negotiations in Delhi. The
discussions centred on the EU’s demand for the inclusion of government procure-
ment, intellectual property rights and competition policy. India insisted on sticking
to the weak provisions that were in the initial HLTG report instead of making any
hard commitments (The Hindu 2008). At the same time, the EU remained unwilling
to make commitments on sanitary and phytosanitary measures (SPS), in particular
on easing requirements for the certification of imported fruit (Press Trust of India
2008a; The Hindu Business Line 2008). Both the EU and India were still aiming for
a conclusion of multilateral trade negotiations. Leading up to the July 2008 WTO
ministerial conference in Geneva, this tied up considerable resources in the bureau-
cracies. The Indian Ministry of Commerce, in particular, was paying close attention
to the latest proposals by developed countries, which added considerable restrictions
to existing special safeguards mechanisms. Given the limited number of trade experts
available in Delhi, this slowed the pace of the BTIA negotiations (Press Trust of India
2008b).
Following the unsuccessful WTO ministerial meeting, a fifth round of negotia-
tions was held in Brussels in September 2008. At this point, the Indian side had
finalised the consultations on its sensitivities and posted a list of 643 products on
the website of the Ministry of Commerce (Corporate Europe Observatory: 20). The
two sides thus exchanged their market access offers and began the process of ‘horse
trading’ demands for trade in goods and narrowing down difficulties. At the same
time, there was still no foreseeable agreement on services trade, competition policy,
intellectual property rights, public procurement, sustainable development, sanitary
and phytosanitary measures and non-tariff barriers (Press Trust of India 2008c).
In March 2009, a sixth round of negotiations took place over a period of three days
in Delhi. India continued to insist on the removal of technical barriers to trade, espe-
cially in light of hidden protectionism following the global financial crisis. Indian
negotiators continued to vehemently oppose the inclusion of intellectual property
rights, especially on the grounds of biodiversity and the protection of traditional
knowledge (Press Trust of India 2009a). Moreover, the Indian side asked for asym-
metrical concessions on trade in goods with 95% duty-free market access to the EU
in return for 90% duty-free market access in the Indian market (Press Trust of India
2009b).
A seventh round of negotiations was held in Delhi in July 2009. Both sides
bracketed earlier discussions about labour and environmental standards and instead
focused their talks on tariff and non-tariff barriers. This likely happened because
of an earlier resolution by the European Parliament in March 2009 that demanded
the FTA would address child and bonded labour by requiring India to sign on to
key conventions of the International Labour Organization. The European Parliament
also demanded that India conform to WTO standards on packaging, marking and
labelling, and ensure the protection of human and animal welfare as well as plant
life (European Parliament 2009). At this point, the European Parliament was flexing
a new muscle; as the Lisbon Treaty was entering into force on 1 December 2009,
the parliament was about to gain jurisdiction over EU trade agreements under the
co-decision procedure. The BTIA would therefore have to be ratified not only by all
EU Member States in the Council, but also by a majority of Members of the Euro-
pean Parliament (MEPs). European negotiators thus became even more cautious of
publicity surrounding the BTIA talks, such as the call in April 2009 by European civil
society actors to immediately halt the negotiations and the June 2009 campaign by
Médecins Sans Frontières (MSF) condemning restrictive intellectual property rights
that could hinder the production of Indian generic medicines. Instead of wading
into the politically treacherous territory at home, bilateral negotiations at this point
were instead focused on market access for EU wine and spirit exports to India—
which faced state-level taxes on imports—and dairy products. On the Indian side,
in spite of the earlier consultation rounds with domestic stakeholders, there was still
great uncertainty and lack of awareness amongst the Indian business community. In
a survey of Indian firms by the Federation of Indian Chambers of Commerce and
Industry (FICCI), more than 60% of respondents remained unsure about the impact
of the BTIA (The Hindu Business Line 2009a)
On 6 September 2009, EU Trade Commissioner Catherine Ashton and Indian
Minister for Commerce and Industry Anand Sharma reviewed the state of the nego-
tiations in Delhi. The EU had commissioned a new study that emphasised comple-
mentarities in agricultural trade and identified the potential for EUR 2 billion of
Indian agricultural exports and EUR 200 million of EU agricultural exports into the
respective other market (The Hindu 2009a). Indeed, unlike in previous agreements,
India was for the very first time willing to include agriculture in the agreement with a
developed country.37 At the same time, EU Ambassador Danièle Smadja commented
that ‘even after seven rounds of talks, […] we have not yet started real negotiation
on tariff and services’ (The Hindu Business Line 2009b). The EU at this point was
publicly expressing its interest in market access for automobiles and services, in
particular financial services, insurance, postal services, architecture, telecom, retail
and professional services (ibid.).
In October 2009, the European Parliament discussed linkages between the BTIA
and climate change as well as the potential social impact of the BTIA, after more than
70 Non-Governmental Organisations (NGOs) raised concerns (The Hindu 2009b).
While the Indian Ministry of Commerce once again firmly rejected any discussion of
non-trade issues, EU negotiators also continued to insist on the inclusion of environ-
mental and social issues, in particular child labour, citing equivalent arrangements in
the recently concluded EU-South Korea FTA (Press Trust of India 2009c). Moreover,
civil society activists, both in the EU and in India, were raising their voices about
the transparency of the negotiation process and democratic accountability (ibid.).
37 FormerIndian Minister of Commerce and Industry (de-identified) in discussion with the author,
3 September 2015.
Research by Indian NGOs also questioned the impact of the liberalisation of the
Indian banking sector on the poor (ibid.).
At the government-to-government level, a significant roadblock to the negotiation
was introduced following the seizure of generic Indian pharmaceuticals in transit to
Brazil via the EU. While the EU claimed this was enforcement of counterfeit regu-
lations in some EU member states, the actions caused concern in Delhi with respect
to arbitrary targeting of Indian generic medicines and they demanded resolution
(Financial Times 2009; The Hindu Business Line 2016a). The EU, on the other hand,
continued to voice concern about discriminatory taxation of wines and spirits at the
state level in India (The Hindu 2009c). At the 10th India-EU Summit in November
2009, the EU also maintained its stance on more transparent public procurement
policies (The Hindu Business Line 2009c). At the same time, the EU was reluc-
tant to ease product testing for regulatory compliance or sign mutual recognition
agreements for services providers (ibid.). While many positions therefore remained
hardened after more than two years of negotiations, EU negotiators were beginning
to signal that they could find a compromise that would address Indian concerns for
agricultural trade (The Hindu Business Line 2009d).
By the eighth round of negotiations in January 2010, the two sides had entered
text-based discussions on all chapters (although none had been concluded at this
point). There was now agreement on a 90% tariff reduction for trade in goods after
a seven-year phase-in period (The Hindu Business Line 2009e). Negotiators also
announced that they have made progress on services but could still not agree on
environmental and social linkages (The Hindu Business Line 2010a). In addition,
there was new political impetus from Indian Prime Minister Manmohan Singh, who
implied that negotiations could be wrapped up by the end of 2010 (Financial Times
2010).
In March 2010, the new EU Trade Commissioner Karel de Gucht and his Indian
counterpart Anand Sharma announced an intensification of negotiations ahead of the
11th EU-India summit in October 2010. However, De Gucht made it clear in Delhi
that the European Parliament would not sign off any agreement that did not address
child labour and climate change, while still expressing hope that this could be solved
through ‘appropriate language’ (The Hindu Business Line 2010b). De Gucht also
signalled openness on granting more access to the EU market for Indian professionals
(The Hindu 2010a). India’s chief negotiator Rahul Khullar remained unwavering on
the former issue: ‘If they [the EU] don’t accept free trade agreements without social
clauses, then I’d say tough luck’ (The Hindu Business Line 2010c).
Significant progress was made during the ninth round of negotiations in April
2010. The EU granted concessions on intellectual property rights for the production
and export of life-saving medicines (The Hindu Business Line 2010d). Moreover,
EU negotiators supposedly acknowledged that differences over child labour and
environmental standards would not hinder the conclusion of the agreement (The
Hindu 2010b). A delegation of Members of the European Parliament (MEPs) had
visited India earlier in 2010 and seemed eager to find mutually acceptable language
on these issues. Perhaps most importantly, the EU announced a ‘labour mobility
pact’ for orderly immigration that addressed most of the Indian concerns around the
cross-border movement of Indian professionals (Press Trust of India 2010a).
At this point, the conclusion of an agreement seemed closer than ever before.
Considerable competitive pressures persisted for some sectors of the Indian economy
in particular to come to an agreement as quickly as possible; shortly before Karel de
Gucht and Anand Sharma met in July 2010 to review the state of negotiations, the
Indian Apparel Export Promotion Council had urged the Indian Commerce Secretary
to conclude the negotiations to offset disadvantages in the Indian apparel industry’s
main market, citing competition from Bangladesh. While 55% of all Indian apparel
exports at the time (worth USD 5.68 billion) were destined for the EU, their market
share had been either plateauing or declining in recent years (The Hindu Business
Line 2010e; Press Trust of India 2010b).
The 10th round of negotiations that took place August 2010 in Brussels thus had
considerable momentum. But discussions at this point were focused on the bilat-
eral investment regime. The Lisbon Treaty, which came into force on 1 December
2009, had created new competences for the EU to negotiate international invest-
ment treaties. Consequently, the EU was making greater demands for investment
protections in the BTIA negotiations. The counter-offer from the Indian side was a
weaker Bilateral Investment Protection Agreement to secure investments and settle
disputes (The Hindu Business Line 2010f). In spite of these disagreements, India’s
chief negotiator Rahul Khullar indicated that ‘“very clear” understanding has been
reached on large number of issues’ (The Hindu Business Line 2010g). This sentiment
was echoed by the Head of the Delegation of the EU to India, Danièle Smadja: ‘We
are making extremely good progress. We have all the elements for a good result. We
have a very strong commitment at the highest political level, both in India and in
the European Union, to go fast now and try to conclude the negotiation by the next
India-EU Summit in Brussels in December’ (The Hindu Business Line 2010h). In
retrospect, however, the tenth round of negotiations was an early high point that was
followed by a string of setbacks.
4 On the Road to Suspension (2010–2013)
A key issue emerged during the 11th round of negotiations in October 2010. The EU,
especially Germany France and Italy, insisted on significant duty reductions for the
automobile sector, which was facing 60% import tariffs for completely built units
and 10% for components (The Hindu Business Line 2010i). The Indian government
remained fundamentally opposed. Since 2006, India’s Ministry of Heavy Industries
had been championing the Automotive Mission Plan, under which high tariff walls
served as incentives to attract FDI. The issue seemed to be only coming to a head at
this point, as India’s Chief negotiator Khullar had previously implied that protections
could be slowly phased out over 10 years (The Hindu Business Line 2010j). The inter-
ministerial discord on the level of protection for automobiles became a significant
roadblock in subsequent negotiations.
A second important fracture emerged on services trade. The EU’s prior commit-
ments for freedom of movement for Indian professionals had created a domestic
political conflict in the United Kingdom. The cabinet of the coalition between Liberal
Democrats and Conservatives was deeply divided. On the one hand, Prime Minister
David Cameron and the Home Secretary opposed non-EU immigration in line with
their prior political pledges to lower overall net migration from 176,000 to 21,700
(The Telegraph 2010; Press Trust of India 2010c). India had demanded up to 50,000
visas a year for highly skilled professionals to the EU, with quotas of up to 20,000
for the UK, 7,000 for German and 3,000 for France, which were clearly not aligned
with the UK’s proposed limits. On the other hand, Secretary of State for Business,
Innovation and Skills Vince Cable managed to get exemption from the immigra-
tion cap for Indians (Press Trust of India 2011a). Still, the UK started to introduce
additional requirements, such as minimum salaries and visa fees, which became a
recurrent issue in BTIA negotiations.
In November 2010, Anand Sharma and Karel de Gucht reviewed the state of nego-
tiations in Brussels ahead of the December 2010 EU-India Summit meeting. The EU
was continuing to insist on including public procurement and investment provisions.
EU negotiators were also re-stating demands for environmental and social standards.
Moreover, they pushed for a wide definition of investment including FDI, shares,
debentures, loans, interests, business concessions, movable and immovable property,
intellectual property rights, technical processes and know-how. These demands were
modelled on the Organisation for Economic Co-operation and Development (OECD)
Multilateral Agreement on Investment, and went significantly beyond India’s existing
commitments (The Hindu Business Line 2011a). In public, Indian negotiators at that
time did not address their stance on investment, but maintained that the red lines
on which they would not be willing to compromise were the inclusion of agricul-
ture, restrictions on generic drugs, automobile as well as labour and environmental
standards (The Hindu Business Line 2010k). At the EU-India Summit, political
leaders gave negotiators the mandate to end negotiations within half a year. Public
resistance came from a number of EU and Indian civil society groups. In an open
letter, 240 NGOs voiced concern that the agreement would exacerbate poverty in
India, in particular data exclusivity provisions that hinder the production of generic
pharmaceuticals (The Hindu 2010c; Press Trust of India 2010d).
In January 2011, the EU made a major step towards meeting Indian demands for
labour mobility by introducing the draft for a ‘Blue Card’ programme that built on the
earlier labour mobility pact. The Blue Card would allow skilled professionals to work
across all member states of the EU—except Denmark, Ireland and the UK. In spite
of this progress, the same month, when India’s chief negotiator, P. K. Chaudhary, and
the EU’s Chief Negotiator, Ignacio García-Bercero, met in Kerala, the discussions
appeared to be stuck. The EU continued to insist on data exclusivity for medicines,
as well as the inclusion of social and environmental standards (in spite of slightly
changed wording that would not explicitly mention the contentious issue of child
labour) (Press Trust of India 2011b). On the other side, Indian negotiators would
not budge on generic medicines or automobiles. The position on generic medicines
was underlined by a ruling of India’s patent office in the Aluvia decision, according
to which pharmaceutical companies cannot block production of generic medicines

(The Hindu Business Line 2011b). Moreover, Indian car manufacturers, with the
support of the Indian Ministry of Heavy Industries, continued to vehemently insist
on excluding cars from the agreement and keeping the tariff structure equivalent to
what had been agreed in the FTAs with Korea and Japan, i.e. only allowing tariff
reductions on automobile parts and components.
It was therefore little surprise that EU demands for further tariff reductions for
completely built units (CBUs) and completely knocked down units (CKDs) were
once again rejected by the Indian side during the 12th round of BTIA negotiations in
April 2011 in Brussels (Press Trust of India 2011c). In fact, the Indian government
indicated that it would soon launch a National Manufacturing Policy to attract FDI
and build a skilled workforce, and to increase the size of the sector from 16 to 26%
of the Indian economy (Press Trust of India 2011d; The Hindu 2011a). According to
India’s Minister of Commerce, Anand Sharma, this would also protect the automobile
sector from FTA concessions (Press Trust of India 2011e). Still, in the negotiations
the EU continued to offer agricultural market access for India in return for automobile
exports by the EU, while India indicated willingness only to move on automobile
components (Press Trust of India 2011f). Anand Sharma also reaffirmed that India
would not accept data exclusivity provisions for pharmaceuticals in any FTA, which
was later also confirmed by Prime Minister Singh after a meeting of the Trade and
Economic Relations Committee (TERC) (Press Trust of India 2011g, h).
The summer of 2010 saw little movement on either side, in spite of meetings
between the chief negotiators in May and a 13th round of negotiations in June. By
September 2010, Karel De Gucht declared there were still ‘substantial problems’,
including on India’s tariffs for the European wine and spirits industry, the services
sector, as well as on energy and public procurement, and noted that ‘at a certain point
negotiations require pragmatism’ (The Hindu Business Line 2011c).
By November 2011, Germany signalled that negotiations were stagnating and the
deadline of coming to an agreement by the EU Summit in February 2012 in Delhi
could not be kept. A senior German official commented that he was ‘not hopeful
of signing the FTA anywhere in the near future’ (The Hindu 2011b). However, the
EU had offered market access for agriculture and textile exports from India in return
for EU car exports and there was now some movement on automobile tariffs (The
Hindu 2011c). India was offering to cut tariffs for luxury cars from 60 to 30% and
to phase them down to 20% after five years. Similarly, tariffs for smaller cars could
be cut from 60 to 50% with a phase-down to 40% after five years. Yet the offer was
not acceptable to the EU (The Hindu 2011b). In January 2011, India presented a new
maximal offer, i.e. tariff rate quotas on luxury cars with a minimum engine capacity
of up to 1500 cubic centimetres to 10–15% (Press Trust of India 2012a). Influential
car associations such as the German VDA and the European ACEA lobbied strongly
against these proposals, arguing that including value-added taxes and other costs
(such as conformity assessment of components), would make their prices in the
Indian market almost double that of other markets (Financial Times 2012). They
also cited an imbalance regarding existing automobile trade, where 223,000 cars
were exported from India to Europe in 2011 and only 4,000 cars were exported from
the EU to India (ibid.). At the same time, the Indian car industry also resisted the
Indian offer from the other direction. Tata Motors publicly came out against tariff
cuts on automobiles in the agreement, saying it would unlevel the playing field in
India between importers and producers (Press Trust of India 2012b). The Society
of Indian Automobile Manufactures (SIAM) considerably increased its lobbying
activity, and moreover, Japanese and Korean car manufacturers in India who were
exporting cars, opposed the deal to protect their investments in Indian factories (The
Hindu Business Line 2012a). To increase the pressure on the EU, in March 2012
India increased its MFN duties on luxury cars from 60 to 75% as a bargaining tactic
(The Hindu Business Line 2012b). The EU in turn sought an exemption from the
Bureau of Indian Standards (BIS) homologation and testing requirements for car
imports (The Hindu Business Line 2012c).
Through most of 2011 and early 2012, negotiations therefore remained deadlocked
over cars. Disagreement even persisted about the overall level of goods liberalisa-
tion. While the EU demanded that 98% of tariff lines would be freed, India asked for
asymmetric commitments (The Hindu 2011c). However, the two sides made some
small steps towards agreement in other areas, such as wording for intellectual prop-
erty rights acceptable to both sides (ibid.). The EU was, moreover, trying to trade
visa quotas for the ‘Blue Card’ programme in return for commitments on govern-
ment procurement (ibid.). The EU also continued to push for the liberalisation of
financial services in India, especially the removal of all restrictions related to branch
licences and foreign ownership, and the removal of priority sector lending require-
ments (The Hindu 2012). Disagreements also persisted on geographical indications
for agricultural products, which the EU wanted automatically recognised, whereas
India requested a registration under domestic rules (The Hindu Business Line 2011d,
2012d).
In May 2012, two developments in India signalled to the EU that new forward
movement in the negotiations might be possible. First, there was an intra-ministerial
showdown between the Minister for Heavy Industries, Praful Patel and the Minster of
Commerce, Anand Sharma, in which Patel appeared to acknowledge that there would
be room for duty reductions on cars (Press Trust of India 2012c).38 Second, a draft
bill on a more transparent and integrous public procurement system was introduced
into the Indian Parliament, which appeared to be a concession to a key demand from
the EU (The Economic Times 2012).
When the 15th round of negotiations took place in Brussels in June 2012, a
number of controversial developments around European investments were looming.
The EU was particularly worried about preferential treatment for domestic manufac-
turers of telecommunications equipment in the procurement of India’s telecommu-
nications networks, which concerned European manufacturers like Ericsson, Nokia-
Siemens and Alcatel-Lucent (The Hindu Business Line 2012e). Moreover, there was
unease about apparent Indian backpedalling on concessions for FDI in retail. Anand
Sharma announced that the government had ‘paused’ a unilateral decision to allow
38 Later in the year Patel also indicated willingness for concessions on luxury cars in exchange for
market access for the export of small Indian cars to the EU (Press Trust of India 2012d).
51% foreign direct investment (FDI) in multi-brand retail because of a domestic

backlash. Although Sharma insisted that the decisions on FDI in retail trade were
sovereign government policy and not part of negotiations with EU, the move was
clearly counter to the interests of major European companies such as Carrefour,
Metro and Tesco that had sought liberalisation in this area. There were also new
issues on the agenda. Following ongoing discussions about the European privacy
regime (which would later result in the General Data Protection Regulation (GDPR)
legislation), the Indian government now sought to obtain a ‘data-secure’ status in
the BTIA negotiation, which would allow Indian companies to process and store
data from European customers on servers located in India (The Hindu Business Line
2012f). In fact, by the time of a meeting of Chief Negotiators in March 2013 in Brus-
sels, Anand Sharma proclaimed that ‘data-secure’ status had become a key demand
(Press Trust of India 2013a).
Because India was introducing various legislative initiatives in 2012 and 2013
in order to comply with EU demands such as public procurement and the lifting of
various FDI restrictions (e.g. multi-brand and single-brand retail, insurance, finance),
the EU entered a holding pattern. However, it was unclear exactly when these commit-
ments would come into force and whether they should be unilateral or become part of
a binding agreement under BTIA (The Hindu Business Line 2013a).39 But legislative
progress was slow and in February 2013 EU representatives noted that the window
of opportunity for an agreement was closing because India was starting to enter
campaign mode for its 2014 general elections. Moreover, the EU was increasingly
investing its energy in trade negotiations with the United States and Japan (Press Trust
of India 2013b, c; Financial Times 2013). Indeed, the domestic political climate in
India was becoming increasingly partisan throughout 2013. The Gujarat Cooperative
Milk Marketing Federation (GCMMF), for example, was vocal in its demands that
the Commerce Ministry would exclude dairy imports from BTIA negotiations (The
Hindu Business Line 2013b). In April 2013, the opposition, Bharatiya Janata Party
(BJP), positioned itself against the FTA, citing a potential flooding of the Indian
market with ‘dairy, poultry, sugar, wheat, confectionary, oilseeds, plantation prod-
ucts and fisheries’ (Press Trust of India 2013d). The BJP demanded scrutiny and
consent by the Parliamentary Standing Committee on Commerce, as well as FDI
restrictions on retail, which would appease its key constituency of small traders (The
Hindu Business Line 2013c). Moreover, the Standing Committee on Commerce of
the Indian Parliament demanded that the Indian government would put further FTA
negotiations on hold until the report of its review into existing FTAs was discussed
in parliament (The Hindu 2013a). Another parliamentary panel requested that the
government ensure the protection of the dairy sector (Press Trust of India 2013e).
In July 2013, the BJP’s lead candidate Narendra Modi addressed the Gujarat Co-
operative Congress claiming that EU dairy would harm domestic agriculture (Press
Trust of India 2013f).
The increasingly antagonistic Indian electoral politics eventually contributed to a
suspension of BTIA negotiations in the summer of 2013. At first, the politicisation
39 The insurance bill was passed in 2015.

restricted the public positions open to the EU. For example, in April 2013, after
frequent criticism in the Indian Parliament and by the wider Indian public, the EU
confirmed that data exclusivity and patent extension would not be part of a final deal
(The Hindu 2013b). But a wide gap between the two sides remained and as time
passed it seemed increasingly unlikely to be closed. The remaining key issues at
this point were FDI caps, market access for wines and spirits, and the ‘data-secure’
status (Press Trust of India 2013g). Moreover, major Indian industry association
came to a defensive position on automobiles, which hardened another key front in
the negotiations. The EU also remained adamant that the draft Public Procurement
Bill would need to be passed before BTIA could be signed.40 Furthermore, the EU
(especially the UK) wanted to see the draft Insurance bill, which would lift FDI
caps, passed before the conclusion of an agreement, and was unwilling to agree to
an alternative transition arrangement proposed by India (The Hindu Business Line
2013e). Lastly, the Indian side was dismayed that the EU’s DG Justice and Consumer
Affairs (DG JUST) had assessed India not to be offering adequate data protections
and Indian officials proclaimed that the decision would delay FTA talks (The Hindu
Business Line 2013f). The EU responded that data adequacy was on a separate track
from BTIA (although it later agreed to set up a Joint Working Group) (Press Trust
of India 2013h). Due to these wide gaps and the upcoming Indian elections, further
negotiation rounds were suspended in the summer of 2013 (Press Trust of India
2014).
5 Negotiations in Limbo (2013–)
With Indian elections from April until May 2014 and the formation of a new govern-
ment, negotiations for the BTIA did not proceed any further. However, in a twist that
some Indian negotiators saw as a subtle snub due to its timing, the EU announced a
ban on mangoes and other vegetables from India in March 2014, supposedly because
of contamination with ‘non-European fruitflies’ (BBC 2015).41
The ball slowly started rolling again after the formation of the new BJP govern-
ment. Indian negotiators indicated in March 2015 that it might now be more flexible
in negotiating tariffs on wines and spirits and auto components. New proposals
were floated, which would impose higher duties on low-cost wines, lower duties on
high-cost wines, and lower duty on spirits bottled in India (The Economic Times
2015a). There were, moreover, some major shifts underway in the political economy
in the Indian alcohol industry. Until this point, the industry had been dominated
by Vijay Mallya, the former controlling shareholder of United Spirits, who was
40 The ability to bid for public procurement remained a major prize for European companies, as
it would allow them participation in India’s annual procurement market of USD 160 billion, in
particular for the telecom, railways, energy, roads, industry and health sectors (with exceptions for
national security and public order) (The Hindu Business Line 2013d).
41 While the ban was initially announced to last until December 2015, it was lifted in January 2015.
holding a dominant 45% market share in India. But the British multinational company
Diageo acquired a controlling stake of 25% of United Spirits, which some observers
expected to dampen demands for protection (Financial Times 2014). At the same
time, new legislative moves in the EU to include sectoral safeguards clauses of 20%
in the Blue Card regime, reopened demands from the Indian side regarding reliable
market access under Mode 4 (The Economic Times 2015a).
However, relations between the EU and the Modi government were not off to a
good start. After Modi’s signature Make in India campaign launched in September
2014, the Society of Indian Automobile Manufacturers (SIAM) once again started
rallying strongly against including cars in the BTIA by claiming it would contra-
dict the goals of the manufacturing policy (Press Trust of India 2015a). Moreover,
a cancellation of the 2015 India-EU summit, overtly for ‘logistical reasons’, was
perceived in India as a negative signal, although the summit was later moved to
November (The Hindu 2015a). In May 2015, the first stocktaking of negotiations
took place between the new Indian Minister of Commerce, Nirmala Sitharaman
and the EU trade commissioner, Cecilia Malmström (Press Trust of India 2015b).
There were positive signs that further EU demands would be met by new unilateral
reforms, such as the liberalisation of the Indian legal services sector, which likely
followed pressure from the United States (The Hindu 2015b). India and the EU thus
appeared ready to resume negotiations. The two sides scheduled a meeting between
India’s chief negotiator J S Deepak and the EU’s Ignacio García-Bercero for late
August 2015. While India indicated this would be a full new negotiation round, the
EU framed the meetings more cautiously as exploratory discussions (Press Trust
of India 2015c). However, instead of closer engagement, the following weeks and
months suggested a further deterioration of relations.
At the beginning of August 2015, the European Medicines Agency banned the
sale of 700 Indian pharmaceuticals products due to concerns about data manipula-
tion in medical trials. This led to estimated financial losses for Indian pharmaceutical
companies of up to USD 1.2 billion. The Indian side perceived the European investi-
gation as protectionist action against its generic pharmaceutical exports (The Hindu
2015c). Consequently, India called off the scheduled BTIA talks, expressing that it
is ‘disappointed and concerned’ (Press Trust of India 2015d; Financial Times 2015).
In October 2015, on a state visit by German chancellor Angela Merkel, the EU asked
for a resumption of talks. India, however, remained firm that the pharmaceutical issue
would need to be resolved first (The Hindu Business Line 2015a). The EU offered
to discuss the issue outside of BTIA talks, which India accepted, and the two sides
agreed to re-start negotiations in early 2016 (The Economic Times 2015b; The Hindu
Business Line 2015b).
The continued stalling of negotiations in the fall of 2015 took place in a climate
of growing Indian reluctance to enter new FTAs. The Ministry of Commerce, for
example, had recently commissioned a study that showed the negative impact of FTAs
on India. At the same time, India’s gaze was shifting East, as there was more and more
concern about being frozen out of new regional economic architecture in the Asia-
Pacific (The Economic Times 2015c). The cooling of feelings towards the EU was not
aided when in January 2016 the UK Home Office’s Migration Advisory Committee
proposed fees on companies hiring non-EU workers as an incentive for companies to

upskill their workforce. This policy initiative primarily concerned ICT professionals,
who received 90% of India’s Tier 2 visas to the UK (The Hindu Business Line 2016b).
It raised red flags with Indian negotiators, who wanted to ensure that new visas were
not facing additional requirements such as fees or minimum income (The Hindu
Business Line 2016c; The Hindu 2016a).
Amidst these negative developments, the new chief negotiators, India’s Commerce
Secretary Rita Teaotia and the EU’s Director-General of Trade Jean-Luc Demarty,
met on 18 January 2016 for a stocktaking exercise. India emphasised the unilateral
measures it had implemented in the previous years (Press Trust of India 2016a). This
included reforms of FDI in insurance (49%), telecommunications (100%), single-
brand retail (100%), e-commerce platforms (100%), banking, defence and railways,
and of the public procurement system. But since many of the unilateral reforms were
already benefiting European companies, this may actually have contributed to the
EU feeling less inclined to give into other demands. In fact, EU negotiators were
now insisting on agreements for tariff cuts as a precondition for talks.
This was echoed at the March 2016 India-EU summit. While Modi insisted that
data-secure status was now a prerequisite for India (The Hindu Business Line 2016d),
there was also no agreement between the two sides to resume talks (Press Trust of
India 2016b). Following the summit, Trade Commissioner Malmström responded
to a letter from the Indian Commerce Minister Sitharaman that talks would only be
resumed after ‘something meaningful’ can be delivered (Press Trust of India 2016c).
In lieu of new market access offers, however, the Indian government started to
increase the pressure on the EU in the investment domain. Shortly before a May
2016 meeting between Indian Commerce Minister Nirmala Sitharaman and European
Union Commissioner for Trade Cecilia Malmström, India unilaterally withdrew from
57 Bilateral Investment Treaties (BITs), including those with EU member states, in
order to create regime based on a model BIT (Financial Times 2016). Malmström
characterised India’s new model BIT as a ‘radical policy shift’ (The Hindu 2016b).
Amongst other measures that are less restrictive than India’s previous BITs, the
model BIT foresees litigation by claimants in national courts for five years before
resorting to an international tribunal. India’s decision created immediate pressures
for EU member states. The first BIT to lapse was with the Netherlands in November
2016, shortly followed by most other member states in the spring of 2017. Germany,
the EU’s greatest investor in India, was soon requesting the inclusion of investment
protections in BTIA negotiations (The Hindu Business Line 2016e). Moreover, by
November the EU wanted to fast-track discussions on a new bilateral investment
treaty, even suggesting doing so outside of the BTIA framework (The Hindu Business
Line 2016f). India continued to insist that the EU accept its model BIT template.
The June 2016 Brexit Referendum further complicated the relationship. Then
Indian Commerce Secretary Rita Teaotia announced that India would need to reassess
its market access offers with the EU in light of Brexit (Press Trust of India 2016d).
Furthermore, India and the UK started holding bilateral trade talks in July (The Hindu
2016c). However, in spite of the new pressures from potential losses of investor
protections and fundamental changes to the basis of reciprocal market access offers,
the negotiations did not move forward. At a meeting between chief negotiators on 15
July 2016, the EU announced that in spite of the Brexit referendum its negotiation
position hadn’t changed, since the UK was legally still a member of the EU (The
Hindu Business Line 2016g). India and the EU were now stuck in a holding pattern
over the final Brexit outcome.
Almost a year later, several developments gave new impetus to restart BTIA
negotiations. In April 2017, Federica Mogherini, the EU’s High Representative for
Foreign Affairs and Security Policy, visited Delhi and delivered a firm push to resume
discussions. In May 2017, during Prime Minister Modi’s visit to Berlin, Germany
provided a strong geostrategic motive for an economic agreement between the EU
and India, namely to offset China’s ‘One Belt One Road’ (OBOR) initiative, which
India (deliberately) did not join earlier that month (Press Trust of India 2017a). Modi
echoed the sentiment, saying that ‘our strategic partnership is based on democratic
values and commitment to an open, inclusive and rules-based global order’ (The
Hindu 2017). Furthermore, in June 2017, the European Court of Justice ruled that
Investor-State Dispute Settlement (ISDS) is a mixed competence between the Euro-
pean Union and its member states. Direct EU negotiations of ISDS would therefore
require the consent of all EU member states or be by default State-to-State Dispute
Settlement (SSDS). Since the former option might be difficult to achieve, a SSDS
mechanism between the EU and India has become somewhat more likely, as SSDS
also corresponds to India’s model BIT.42 The European Commission’s new approach
to pursue separate negotiating tracks for investment and trade with Singapore and
Vietnam will likely also become applicable. Lastly, in spite of the ups and downs in the
negotiations, economic linkages between the EU and India have continued to grow.
A study in June 2017 showed the potential gains for Indian business services (USD
6.4 billion) and textiles/apparel (USD 6.6 billion), which compared favourably to
losses for automobiles (USD 1.6 billion), minerals (USD 1.1 billion), and machinery
(USD 500 million). Given the overall size of the Indian automobile industry (USD
74 billion in 2017), any losses could furthermore be offset by integration into global
value chains (The Hindu Business Line 2017a).
In this light, the EU once again took concrete steps to bring the agreement to
conclusion. At the 14th EU-India Summit in October 2017 in Delhi, the EU indi-
cated that it would be willing to work together with India on data protection (Press
Trust of India 2017b). The EU had recently signed into law the General Data Protec-
tion Regulation (GDPR), which would come into force in May 2018. However, the
EU also signalled that GDPR adequacy needed a separate legal framework from
BTIA (The Hindu Business Line 2017b). The development of such a framework
was aided by an August 2017 Indian Supreme Court decision, which found privacy
to be a fundamental right under the Indian constitution. The Indian government is
implementing this decision with a Personal Data Protection Bill that is in many
respects modelled on the GDPR and is currently in the legislative process. If EU
authorities (DG JUST) grant data adequacy status to India, a key demand from India
in the BTIA negotiations will have been addressed. It is notable, however, that in
42 European Court of Justice Opinion 2/15 of the Court.

spite of these positive developments there was nevertheless no explicit decision at

the October 2017 summit to resume trade negotiations or start a separate investment
track to fill the gap of investor protection when existing BITs expired (Press Trust of
India 2017c).
However, in the trade domain there were finally some new developments. In
November 2017, the new Chief Negotiators Anup Wadhawan from the Ministry of
Commerce and Industry and Helena König from EU’s DG TRADE met to take stock
of the negotiations. For the first time since 2015, India was indicating willingness
to show flexibility on automobiles and wines and spirits in return for data adequacy
status (The Hindu Business Line 2017c). It was thus of even greater dismay to
German investors, when India began increasing duty on automobile parts in February
2018 (The Economic Times 2018). Nevertheless, the situation in 2018 appeared
unchanged. Chief negotiators met in March 2018, followed by working-level meet-
ings in April and May. As the EU maintains its preconditions to resuming talks,
the Indian flexibility on automobiles and wines and spirits seems not yet to have
resulted in any concrete market access offers. However, India has continued to look
for data-secure status, which the EU would only provide once an adequate domestic
legal framework is in place (Press Trust of India 2018a). It is therfore perhaps notable
that India set up an inter-ministerial working group on e-commerce shortly after the
March 2018 talks with the EU (Press Trust of India 2018b).
6 Conclusion
As this chapter has shown, entering negotiations for a trade and investment agreement
was an unusual step for both India and the EU when seen against the backdrop
of their previous trade agreements. For the EU, it was the first negotiation with a
large emerging market under its 2006 Global Europe Strategy, which emphasised
commercial gain over using trade agreements as a tool for political leverage. The EU
was looking for new export markets and was not granting access to its market for
strategic foreign policy objectives. The EU’s larger member states have, moreover, by
and large continued to have their own foreign policy priorities vis-à-vis India. India,
on the other hand, previously entered into trade agreements in Asia with strategic
foreign policy goals in mind, often willing to make trade-offs in the endgame of a
negotiation to come to an agreement. While India has important bilateral political
relationships with major European powers, diplomatic channels were at the nation-
state level, not with the EU as a whole. The BTIA negotiations were therefore not
embedded in a process that facilitated the linking of foreign policy objectives with
trade. This diminished the scope for a grand strategic bargain.
In the inception phase of the negotiations, it became clear that the EU’s objec-
tives were driven by the market access demands of European export industries, in
particular the car industry, wines and spirits, as well as retail, insurance and financial
services. The EU also pushed for the inclusion of the ‘Singapore issues’ (govern-
ment procurement, investment, trade facilitation, competition) which had proven
contentious in multilateral trade negotiations. At the same time, India had a clear
interest in exporting textiles and clothing to the EU as previous preferential quotas
for this sector were phasing out. Beyond this, it was difficult for Indian negotiators
to identify further export interests in the European market due to a lack of demand
from domestic industry. Indian demands then focused on short-term visas for its IT
professionals, which proved to be a politically sensitive topic in the United Kingdom.
Leading up to the suspension of the negotiations in 2013, the new co-decision
powers of the European Parliament under the Lisbon Treaty increased pressure from
within the EU to include labour and environmental standards in its trade agree-
ments. However, given a deeply engrained post-colonial identity that places a strong
emphasis on sovereignty, this was a red line for India. Moreover, unwillingness by
German industry to accept a deal on cars and car parts that was equivalent to the
market access granted to South Korea and Japan, in combination with a new Indian
industrial policy on car manufacturing, ground the negotiations to a halt. In combi-
nation with India’s slow progress on implementing domestic reforms on govern-
ment procurement, investment caps, as well as the multi-brand retail, insurance and
financial services sector, the negotiations were suspended in the summer of 2013.
Since 2013, negotiations have entered the ongoing limbo phase, which has seen
a gradual narrowing of some outstanding issues, no progress on others, and also the
emergence of new difficulties. India has been implementing domestic reforms on
public procurement, insurance, investment caps and data governance, but in spite
of some earlier signs of progress, the multi-brand retail sector and the financial
sectors largely remain closed to firms from the EU. Most importantly, there will
likely not be any progress in the negotiations until there is more clarity about the
United Kingdom’s future relationship with the European Union, since the UK’s
export interests for financial and legal services as well as its visa regime for Indian
services professionals were key ingredients of the negotiations. The EU’s new trade
and investment architecture, under which trade and investment agreements have to be
separately negotiated, and India’s new investment regime add further complications
for the negotiations. Moreover, until key draft legislation for India’s future digital
framework, including the e-commerce policy, the Personal Data Protection Bill and
amendments for the Information Technology Act, are in force (likely by the end of
2020) India will have to wait to obtain ‘data adequacy’ status under EU GDPR rules.
A number of recent developments have added pressure on India to come to a
conclusion. In June 2019, the United States withdrew India’s preferences under its
GSP and threatened to cancel H1B visas if India failed to provide guarantees on open
cross-border data flows. While some of the moves by the United States Trade Repre-
sentative (USTR) were strong-arm negotiating tactics, they were still able to convince
officials in Delhi that it would be wise to guarantee more market access outside of
the United States as soon as possible. Moreover, since August 2019, Indian farmed
shrimp exports are under pressure following the signing of an EU-Vietnam FTA in
June this year, which requires far less regulatory testing at import than imports from
India (50% sampling for compliance, possibly used as a subtle instrument of pressure)
(The Hindu Business Line 2019a). Export competition from Vietnam could add to the
competitive pressures that Indian apparel exports face from Bangladesh (The Hindu
Business Line 2019b). There also appears to be scope to compromise on core labour
and environmental standards as well as greater willingness by the EU to make some
concessions on human rights references in the trade agreement (The Hindu 2019).43
Most importantly, there have recently been calls from the MEA-affiliated think tank
RIS to approach the EU-India BTIA from a geostrategic perspective, especially in
light of concerns about Regional Comprehensive Economic Partnership (RCEP) and
the ongoing crisis of the multilateral trading system. In fact, according to Commerce
and Industry Minister Piyush Goyal, India’s most recent decision not to join the
RCEP has given new impetus to finally conclude the agreement with the EU (Press
Trust of India 2019). The increasingly strategic nexus between India and the EU,
as well as deeper coordination on foreign policy between EU member states, could
mean that both sides may be more willing to compromise on outstanding issues in
the future.44
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a strategy to cope with post-TPP era. The Economic Times, November 21.
The Economic Times. 2018. Germany Wary of India Hiking duty on auto parts. The Economic
Times, February 14.
The Guardian. 2015. Scotch whisky industry ‘bigger than UK iron and steel or computers’. The
Guardian, January 27.
The Hindu. 2000. South Africa seeks to negotiate free trade pact with India. The Hindu, February
16.
The Hindu. 2006. India, EU to push for big trade, investment deal. The Hindu, October 14.
The Hindu. 2007a. Indo-EU pact a threat to fishing sector. The Hindu, August 31.
The Hindu. 2007b. Proposed FTA will benefit textile sector. The Hindu, November 29.
The Hindu. 2008. EU-India Free Trade Agreement hits roadblock. The Hindu, March 4.
The Hindu. 2009a. EU favours FTA with India. The Hindu, September 12.
The Hindu. 2009b. Lack of transparency and debate in India-EU free trade agreement. The Hindu,
October 22.
The Hindu. 2009c. Let India-EU openly discuss child labour, environment. The Hindu, October 21.
The Hindu. 2010a. Free trade agreement talks with EU to be stepped up. The Hindu, March 5.
The Hindu. 2010b. FTA will hurt livelihoods in India, Europe. The Hindu, December 10.
The Hindu. 2010c. Non-trade issues not to hamper trade talks with EU. The Hindu, May 5.
The Hindu. 2011a. Manmohan to clear draft manufacturing policy soon. The Hindu, April 9.
The Hindu. 2011b. Logjam in India-EU FTA talks. The Hindu, November 17.
The Hindu. 2011c. India-EU FTA talks set to gather pace. The Hindu, November 19.
The Hindu. 2012. For a fair, free trade pact with Europe. The Hindu, February 9.
The Hindu. 2013a. Knitwear exporters upset over panel caution on signing trade pact with EU. The
Hindu, April 13.
The Hindu. 2013b. Not insisting on patent extension, says EU. The Hindu, April 13.
The Hindu. 2015a. Go forward on India-EU talks. The Hindu, May 20.
The Hindu. 2015b. Foreign law firms will soon operate in India. The Hindu, June 30.
The Hindu. 2015c. India may drag EU to WTO if drugs ban is not lifted. The Hindu, August 7.
The Hindu. 2016a. India-EU free trade impasse may end: CII. The Hindu, April 11.
The Hindu. 2016b. India, EU aim to break FTA impasse. The Hindu, June 2.
The Hindu. 2016c. India, U.K. to start free trade talks. The Hindu, July 9.
The Hindu. 2017. Modi in Berlin today, says ‘new chapter’ in ties. The Hindu, May 29.
The Hindu. 2019. Talking trade with the EU. The Hindu, August 27.
The Hindu Business Line. 2000. Assocham wary of post-MFA garment exports. The Hindu Business
Line, July 7.
The Hindu Business Line. 2002. CII, Europe body plan joint working group—To boost textile trade,
remove barriers. The Hindu Business Line, November 18.
The Hindu Business Line. 2004. FICCI moots panel to study free trade pact with EU. The Hindu
Business Line, June 29.
The Hindu Business Line. 2005. India Inc wants FTA in services with EU, says Assocham survey.
The Hindu Business Line, September 6.
The Hindu Business Line. 2006. India-EU Bacchanalian cup runneth over. The Hindu Business
Line, October 13.
The Hindu Business Line. 2007a. Work on to compile list of products for India-EU FTA. The Hindu
Business Line, August 29.
The Hindu Business Line. 2007b. High-tech machines may be off sensitive list for India-EU trade.
The Hindu Business Line, September 29.
The Hindu Business Line. 2008. FICCI for removal of trade barriers with EU. The Hindu Business
Line, February 4.
The Hindu Business Line. 2009a, Protectionist policies of EU hitting Indian cos, says FICCI. The
Hindu Business Line, August 3.
The Hindu Business Line. 2009b. EU expects progress in FTA talks next year. The Hindu Business
Line, September 12.
The Hindu Business Line. 2009c. India, EU hope to close talks on FTA in a year. The Hindu Business
Line, November 7.
The Hindu Business Line. 2009d. EU hopeful of free trade pact with India next year. The Hindu
Business Line, 14 October.
The Hindu Business Line. 2009e. India-EU trade down 18% in first half. The Hindu Business Line,
October 17.
The Hindu Business Line. 2010a. Weed out the differences. The Hindu Business Line, March 8.
The Hindu Business Line. 2010b. EU free trade pact with India wants to address social issues. The
Hindu Business Line, March 5.
The Hindu Business Line. 2010c, India rejects EU demand on social clauses in trade pact. The
Hindu Business Line, March 12.
The Hindu Business Line. 2010d. Free trade pact will not limit India making life-saving drugs. The
Hindu Business Line, May 4.
The Hindu Business Line. 2010e. Garment exports in 2009–10 decline 2.64%. The Hindu Business
Line, July 10.
The Hindu Business Line. 2010f. India against ‘TRIPs-plus’ clauses in bilateral trade pacts. The
Hindu Business Line, August 17.
The Hindu Business Line. 2010g. Free trade pact with Malaysia likely by year-end, says Khullar.
The Hindu Business Line, August 27.
The Hindu Business Line. 2010h. India-EU trade talks may be concluded by Dec. The Hindu
Business Line, September 16.
The Hindu Business Line. 2010i. Retain imported car tariff structure post India-EU FTA. The Hindu
Business Line, November 28.
The Hindu Business Line. 2010j. EU to push for auto duty cuts under free trade pact. The Hindu
Business Line, October 13.
The Hindu Business Line. 2010k. Trade talks with EU to conclude by Spring 2011. The Hindu
Business Line, December 10.
The Hindu Business Line. 2011a. Problems in trade talks with EU. The Hindu Business Line,
February 18.
The Hindu Business Line. 2011b. EU’s pharma trade hoax. The Hindu Business Line, February 25.
The Hindu Business Line. 2011c. India, EU free trade pact not likely before next year. The Hindu
The Hindu Business Line. 2011d. India can’t say ‘cheese’. The Hindu Business Line, February 11.
The Hindu Business Line. 2012a. Auto-makers’ body strongly opposes lower import duty on
European cars. The Hindu Business Line, February 4.
The Hindu Business Line. 2012b. Import duty hike on luxury cars gives India a bargaining chip.
The Hindu Business Line, March 20.
The Hindu Business Line. 2012c. EU wants testing requirements for car imports removed in FTA.
The Hindu Business Line, April 27.
The Hindu Business Line. 2012d. EU, India hold talks on free trade pact ahead of summit. The
Hindu Business Line, February 10.
The Hindu Business Line. 2012e. EU takes up India’s ‘protectionist’ measures with the Centre. The
Hindu Business Line, June 22.
The Hindu Business Line. 2012f. Commitment to open retail trade not due to EU’s demand. The
The Hindu Business Line. 2013a. EU waits for Budget sops to finalise free trade pact with India.
The Hindu Business Line, January 24.
The Hindu Business Line. 2013b. Amul wants protection for dairy farmers. The Hindu Business
Line, March 27.
The Hindu Business Line. 2013c. BJP demands House scrutiny. The Hindu Business Line, April
11.
The Hindu Business Line. 2013d. No trade pact without assurance on Govt procurements. The
The Hindu Business Line. 2013e. India may offer compromise plan for insurance. The Hindu
Business Line, August 8.
The Hindu Business Line. 2013f. EU not ready to give India ‘data secure’ status. The Hindu Business
Line, June 16.
The Hindu Business Line. 2015a. India firm on resolution to GVK Bio’s drug issue before re-opening
FTA talks with EU. The Hindu Business Line, October 19.
The Hindu Business Line. 2015b. India, EU agree to re-start talks on free trade pact early next year.
The Hindu Business Line, November 23.
The Hindu Business Line. 2016a. Unfair Trade. The Hindu Business Line, February 6.
The Hindu Business Line. 2016b. Proposed work visa curbs by UK, new irritant for India-EU FTA
talks. The Hindu Business Line, January 22.
The Hindu Business Line. 2016c. India offers EU compromise formula to break deadlock in trade
talks. The Hindu Business Line, March 30.
The Hindu Business Line. 2016d. PM to raise FTA, pharma exports issue with EU. The Hindu
Business Line, March 17.
The Hindu Business Line. 2016e. Germany pushes for investment protection pact under India-EU
free trade agreement. The Hindu Business Line, September 21.
The Hindu Business Line. 2016f. EU wants to start talks with India on a bilateral investment treaty.
The Hindu Business Line, November 17.
The Hindu Business Line. 2016g. EU wants ‘realistic prospect’ for resuming FTA talks. The Hindu
Business Line, July 15.
The Hindu Business Line. 2017a. Why India should set store by its FTA with EU. The Hindu
Business Line, June 14.
The Hindu Business Line. 2017b. Germany, UK will gain the most from an India-EU free trade
deal. The Hindu Business Line, October 26.
The Hindu Business Line. 2017c. India, EU to take another shot at reviving FTA talks. The Hindu
Business Line, November 9.
The Hindu Business Line. 2019a. EU-Vietnam FTA may see India’s seafood exports to bloc dry
up. The Hindu Business Line, August 16.
The Hindu Business Line. 2019b. EU’s free trade pacts hurting Indian apparel exports. The Hindu
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Nicolas Köhler-Suzuki is a policy advisor on international trade at International Trade Intelli-

gence in Paris. He has worked on trade policy issues with international organisations and national
governments and provided expertise on the negotiation and implementation of multilateral and
regional trade agreements. Prior to his advisory work, Nicolas was a doctoral researcher at the
University of Cambridge, with a focus on Indian trade agreements.

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Determinants and Impediments

of the EU-India Bilateral Trade

agreements at the University of Cambridge. The author thanks Gisela Müller-Brandeck-Bocquet,

2 Background to the Start of the BTIA Negotiations

in discussion with the author, 21 April 2017.

Advisor) in discussion with the author, 21 April 2017.

Developed Countries (LDCs) by the United Nations.

14 SAFTA entered into force in 2006.

3 The Inception of the BTIA Negotiations (2005–2010)

The September 2005 EU-India summit in Delhi operationalised a number of commit-

in discussion with the author, 9 December 2014.

following years. It outlined the growth in India’s information technology services,

between competition authorities and coordination of enforcement. Lastly, the HLTG

4 On the Road to Suspension (2010–2013)

to which pharmaceutical companies cannot block production of generic medicines

51% foreign direct investment (FDI) in multi-brand retail because of a domestic

39 The insurance bill was passed in 2015.

5 Negotiations in Limbo (2013–)

proposed fees on companies hiring non-EU workers as an incentive for companies to

42 European Court of Justice Opinion 2/15 of the Court.

spite of these positive developments there was nevertheless no explicit decision at

43 EU negotiator (de-identified) in discussion with the author, 13 March 2020.

Nicolas Köhler-Suzuki is a policy advisor on international trade at International Trade Intelli-

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