The recent India and European Union (EU) negotiations have generated a serious political debate on Free Trade Agreement (FTA), bilateral trade, economic cooperation and barriers to trade and investment. India and EU, considered one of the world's fastest growing economies, have begun negotiations for an ambitious and comprehensive bilateral free trade agreement. Addressing a joint press conference, Mr. Mandelson described the ongoing bilateral trade agreement as a "building block'' for an ambitious World Trade Organization agreement. He said that, trade flows were doing well but could do better and that was why the two sides, India and EU, were planning to pursue the bilateral trade pact. He further stated that, discussion for the "ambitious and wide ranging agreement" will be held in mid December with the arrival of EU's Director General, in New Delhi, that will fix targets for next 12 months and then for another 12 months at the outset.

The ongoing Free Trade Agreement covers not just trade in goods, but also services and investments. While India is interested in having greater access for its professionals in the EU market, the European Union wants India to lower duties on industrial goods. It will also see the signing of an "action plan" that will chart out a way forward for political, trade and investment, economic, cultural, and academic relations. Such an action plan will also work against terrorism and build up a security dialogue. Besides, it will endeavour to meet common environmental challenges by strengthening two way exchanges in alternate fuel technologies.

India- EU FTA marks a willing urge to forge "Strategic Partnership" and cooperate in areas such as space and energy. The agreement will confirm India as a global player and bring New Delhi into an elite club of countries that includes US, Canada, Russia and Japan. India's cooperation in fusion energy project and renewed flexibility on the part of EU, to give India access to encryption codes for military grade end has emerged as an important area of cooperation. New Delhi also stands to gain in certain other fields such as textiles and biotechnology.

At Brussels, India's Commerce and Industry minister Kamal Nath said that, "a free trade accord between India and the European union will help in breaking the current impasse in the World Trade organization." Free Trade Agreements are "building blocks" of a multilateral global order. These initiatives will help break the impasse in the WTO. New Delhi is certainly looking for investments, but it is also an investor. The issue of lowering duties on wines and spirits imported from EU countries has emerged as a major area of contention. EU is asking India to open up its market to agricultural products like wine. Concerns are also increasing on revenue and reciprocity. However, Mandelson made it clear that, EU supported India's demand for safeguarding the interests of its farmers. He also favoured the protection of Indian agriculture through the mechanism of Special Products Scheme (SPS), and pointed out that SPS aims to ensure the livelihood of subsistence farmers. He accepted that, the highly subsidized farm products harm the interest of developing countries like India.

EU wants New Delhi to grant greater access in information technology (IT) sector. It held that, India stands to gain by liberalizing trade and services, and by opening up its market in sectors such as biotechnology, agriculture etc. It will bring technology benefits to India.

However, New Delhi's contention in this direction is that, EU is using non tariff barriers to block imports from India such as shrimps and herbal medicines. The Indian exporters face a large number of non tariff barriers in EU market. Similarly, the recognition of Indian professional degrees in medical, accountancy and legal sectors are yet another field of concern. In a recent interview, Kamal Nath noted that India would continue to focus on issues relating to tariff peaks and tariff escalation in the EU markets, as these had a direct negative impact on countries exports.

Hopefully, such an agreement will prove fruitful for both EU and India and encourage positive competition, specialization and drive down prices for consumers by increasing economic efficiency. It is also hoped that this will contribute to economic development and growth and enhance technological capability.