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A Quick Glance at Trade between India and Europe

The value of EU-India trade grew from € 28.6 billion in 2003 to € 72.5 billion in 2014 (Data European Commission). This significant increase has occurred despite the challenging environment due to long and often difficult negotiations about the Free Trade Agreement (FTA). These negotiations between India and the EU were launched in 2007 and are still ongoing. The issues related to intellectual and industrial property represent sizeable obstacles to a successful negotiation. Indian authorities, under the initiative and leadership of the new Prime Minister N. Modi, have started a process of very promising economic reforms. These include the possibility for 100% foreign ownership in the telecom sector or the raising of foreign direct investment (FDI) limit of 26% to 49% in the field of insurance companies. However, the maintain of substantial tariff and non-tariff barriers continues to impede the development of strong trade relations. Yet, India has become one of the favourite destinations for global FDI flows. More than a third of total FDI inflows is invested into the telecom, construction, pharmaceutical, chemicals and computer sectors. It should also be pointed out that in the next 15 years over 2.400 Indian firms are expected to invest in markets overseas. Since 2007 Indian companies have invested more than US$ 21 billion in manufacturing activity abroad. Outside the EU, Switzerland is one of the ten largest investors in India (Data FDFA). Around 200 Swiss companies are active in this country. And the Swiss direct investment in India amounted to CHF 6.82 billion at the end of 2013 (Data Swiss National Bank). The FTA which should be signed within a reasonable time will give a powerful signal to develop trading exchanges between India and the European countries.

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