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Strategy to seal Europe trade deal

India is likely to place a proposal to cut duties on European wines and spirits to 40 per cent over three years to kick-start the stalled free trade agreement (FTA) talks with the European Union.

R. Suryamurthy Published 25.03.16, 12:00 AM

New Delhi, March 24: India is likely to place a proposal to cut duties on European wines and spirits to 40 per cent over three years to kick-start the stalled free trade agreement (FTA) talks with the European Union.

New Delhi plans to make this offer at the 13th India-EU summit in Brussels on March 30, which will be attended by Prime Minister Narendra Modi.

Both sides have blamed each other for the delay in the agreement even after several rounds of talks.

The EU has argued that India's reluctance to show more flexibility in the import of its automobiles, wine, cheese and legal services has delayed the prospects of a deal.

New Delhi, on the other hand, would like the EU to address visa problems of Indians who seek access to the European labour market.

India had been upset in the past with Europe's insistence on human rights and saw it as an interference in its internal affairs. However, giving up the human rights clause in FTAs will betray the European idea of a peace project.

India is willing to lower the import duty on European wines, provided the country is given a greater access in IT, commerce ministry officials said.

Besides wines, New Delhi is open to concessions on auto parts as the Narendra Modi-government looks to leverage a trade agreement to further its Make in India and Digital India initiatives.

On its part, Brussels must grant a "data secure nation" status and facilitate the easier movement of skilled professionals in Europe.

India is willing to charge an average duty of 75 per cent across different varieties of wines and spirits initially, with a clause to lower this to 40 per cent over three years.

The EU, however, is demanding deeper concessions. It wants duties on wines and spirits to be cut to just 20 per cent for high-priced spirits, 30 per cent for middle-level products and 40 per cent for the cheap varieties.

In automobile and auto parts, the Indian government is willing to reduce duties on certain high-tech components such as automotive microchips, which are difficult to make in the country, despite opposition from local industry bodies.

Officials said the move was aimed at enabling easier transfer of technology. The Europeans want duties on automobiles to be eliminated gradually from the current levels of 80-130 per cent.

India is seeking an improved market access in the services sector, which contributes 57 per cent to the gross domestic product (GDP).

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