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Free trade pact with Europe nears reality

New Delhi, Feb. 7: The European Union today said the prospects of a free trade agreement with India had brightened with the narrowing down of differences over goods and services, which will have vastly reduced duties.

“We have come to the crunch as there are not many issues left for the negotiators. The deal is within the range, we should get there, but we are not there yet,” Joao Cravinho, ambassador of the European Union to India, said.

He said the agreement would lead to an extremely promising road ahead. Negotiations were all about “giving a little and taking a little”, he said.

India and the EU held 13 rounds of negotiations over the past six years. However, both sides have failed to move towards an agreement because of issues such as the slashing of tariffs on European cars and wines and the relaxation of the visa regime for Indian professionals.

Cravinho said if the import duty on European cars were removed, the prices of premium sedans and high-end SUVs (sports utility vehicles) would go down by half.

The deal will be a broad-based trade and investment agreement, which will cover over 95 per cent of tariff lines. The pact seeks to sharply reduce tariffs on goods and liberalise services and investment provisions.

According to Cravinho, the window of opportunity to conclude the deal is narrow as India will be going into election mode for the 2014 parliamentary polls.

But the free trade pact will benefit both sides and help India and the 27-nation bloc to grow and strengthen their relations, he said.

 
 
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