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What are the obstacles to free trade?

We all agree that progress was registered during the last negociations for a free trade agreement (FTA) between the EU and India. But these negotiations were launched in 2007! Thus we must also admit that these talks have been stumbling for nearly 6 years. No doubt that India is an important trade partner for the EU and vice versa. The value of EU-India trade grew from € 28.6 Billion in 2003 to € 79.9 Billion in 2011. However europeans denounce the lack of economic reform and that too little has been made to dismantle trade barriers in India. It is a fact that India maintains substantial tariff and non tariff barriers that hinder trade with the EU. And european companies still complain about the complicated customs procedures. On the other hand indian negotiators claim that the FTA could devastate the country's economy. They point in particular at the heavily subsidised agricultural exports which could ruin up to 80 million farmers. They also fear that a greater market access to european banks or insurance companies and above all to foreign retailers would put India's economy and social stability at risk. It is obvious that these issues won't find a solution overnight.

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