EU and India agree to relaunch trade talks

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The EU and India have agreed to restart long-stalled negotiations on a comprehensive trade deal as the two sides seek to boost their economic engagement and respond to the increasing power of China. 

Brussels and New Delhi also agreed to parallel talks aimed at achieving an investment protection agreement and a deal to protect regional speciality foods.

The moves were settled at a virtual EU-India summit on Saturday and represent an effort to deepen ties after global growth was torpedoed by the Covid-19 pandemic. Charles Michel, the European Council president, said the two sides were opening a “new chapter” in their partnership. 

“We agreed to resume negotiations for a balanced, ambitious, comprehensive and mutually beneficial trade agreement which would respond to the current challenges,” the EU and India said in a joint six-page statement. “We agreed that in order to create the required positive dynamic for negotiations, it is imperative to find solutions to longstanding market access issues.” 

The agenda sets out a plethora of initiatives to boost ties on topics ranging from air transport to student exchanges. The detailed programme comes at a time when post-Brexit Britain is also investing a lot of diplomatic energy in seeking closer ties with New Delhi.

The need to respond to the burgeoning power and reach of Beijing has injected new momentum into dialogue between the EU and the Indian prime minister Narendra Modi, who held talks via videoconference on Saturday.

EU-China relations have become increasingly tense, raising questions over the future of an investment partnership that received political backing last year. In March the EU joined western partners in imposing sanctions against Chinese officials over human rights violations. Beijing responded with sanctions on European officials and politicians. 

Brussels believes that India’s decision to pull out of negotiations on a China-backed trade pact last year opened a window as New Delhi hunts for alternative partners. But the EU and India will face an uphill battle if they are to achieve a comprehensive trade agreement following previous breakdowns in the talks. 

Earlier efforts by the EU and India stalled despite work between 2007 and 2013, because of differences over issues including professional services and car parts. Other contentious topics ranged from Scotch whisky to data protection standards. 

The EU and India also struck a connectivity partnership on Saturday, aiming at co-operation in areas including digital, energy and transport infrastructure. The two sides also want to boost regulatory co-operation on emerging technologies.

Despite the vows to deepen co-operation, the EU is resisting a push backed by countries including India for patent waivers that supportive countries argue would boost the production of Covid-19 vaccines. Modi is under intense pressure at home as the country grapples with a worsening health crisis, with more than 400,000 reported daily infections in a brutal second wave. 

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