Merkel and Singh call for EU-India Free Trade Agreement

BERLIN:German Chancellor Angela Merkel and India’s Prime Minister Manmohan Singh on Thursday, 11 April, urged for a swift finalisation of a Free Trade Agreement between the European Union and India.

“We have a situation in which such an agreement seems feasible,” said Merkel in Berlin after the second intergovernmental talks between Germany and India.

“We did not overcome all problems but I want to thank the Indian side for their flexibility in some areas in which we came further today than we did for some years.”

India has shown substantial flexibility in the talks, which had been at stalemate in recent years, as Merkel said.

“We Europeans have a clear idea what we want our Free Trade Agreements to look like. India is a large country and has already Free Trade Agreements with Japan, with South Korea, with ASEAN. And we can not expect for everybody to agree with all our wishes,” the German Chancellor said.

“If there is flexibility on both sides, and I feel that there is a great willingness on the Indian side, then I can only say that in our experience as soon as we had a Free Trade Agreement then the trade grew significantly, and therefore we should do whatever it takes.”

On Friday, 12 April, further talks are expected to be held in Brussels, both Merkel and Singh said.

Merkel highlighted the movement of the Indian government in the insurance sector. India is going to increase the percentage of foreign investment in joint ventures from 29% to 49%, Prime Minister Singh said.

“Our cabinet has already approved the proposal to raise the level of foreign equity participation from 29% to 49%. But this requires parliamentary legislation.”

The German Chancellor also proposed a step-by-step reduction of customs barriers in the automobile sector.

According to Indian media reports, India will look for German technology expertise “in the field of renewable energy.”

The first round of intergovernmental consultations took place in New Delhi in May 2011.

Merkel and Singh also witnessed the signing of several German-Indo agreements.