Digital Desk, New Delhi. There is a possibility of reduction in import duty on labor-intensive sectors like textiles and footwear as well as cars and wine under the free trade agreement (FTA) between India and the 27-nation European Union (EU). The completion of this agreement will be announced here on January 27.
The agreement is also expected to ease rules for many service sectors. India and the EU are scheduled to announce the conclusion of the FTA on January 27 after 18 years of long negotiations. The talks began in 2007. India has emphasized zero-duty access for its labour-intensive sectors such as textiles, leather, apparel, gems and jewelery and handicrafts.
Quota-based concessions for automobile sector
This has also been a major demand in the previous trade agreements signed by India with Britain, United Arab Emirates (UAE) and Australia, which has been accepted. On the other hand, the EU is seeking duty cuts on its automobiles and alcoholic beverages including wine. India has given quota-based concessions to the automobile sector in its trade agreement with Britain, while wine has been included in agreements with Australia and New Zealand.
India has provided duty concessions to Australian wines in a phased manner over a period of 10 years. In September last year, Commerce Secretary Rajesh Aggarwal had said that the proposed trade agreement with the European Union would provide huge opportunities for the domestic auto industry to increase exports and forge new partnerships with European giants.
India kept dairy and agriculture sectors out of the agreement
The average duty on Indian goods in the EU is 3.8 per cent, but on labour-intensive sectors it is around 10 per cent. At the same time, India's average duty on EU goods is 9.3 percent, which includes higher duties on automobiles (35.5 percent) and chemicals. India imposes 100-125 percent duty on alcoholic beverages.
Sensitive agricultural issues have been kept out of this deal. The EU has been protective of its beef, sugar and rice markets, while India has protected its dairy and agriculture sectors from global competition so that the livelihoods of small farmers are not affected.
(With inputs from news agency PTI)
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