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    The document discusses the potential benefits and costs of an EU-India Free Trade Agreement. Some key benefits include relatively easy negotiations due to little trade overlap and India's growing imports from the EU. However, a potential cost is trade diversion, as India may increase EU imports at the expense of more efficient third country suppliers. Structural and policy differences between the EU and India also pose impediments. The FTA could help India converge to international trade norms over time.

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    The document discusses the potential benefits and costs of an EU-India Free Trade Agreement. Some key benefits include relatively easy negotiations due to little trade overlap and India's growing imports from the EU. However, a potential cost is trade diversion, as India may increase EU imports at the expense of more efficient third country suppliers. Structural and policy differences between the EU and India also pose impediments. The FTA could help India converge to international trade norms over time.

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    Download as PPTX, PDF, TXT or read online from Scribd
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    6 views15 pages

    Presentation 9

    Uploaded by

    sivagabbi
    The document discusses the potential benefits and costs of an EU-India Free Trade Agreement. Some key benefits include relatively easy negotiations due to little trade overlap and India's growing imports from the EU. However, a potential cost is trade diversion, as India may increase EU imports at the expense of more efficient third country suppliers. Structural and policy differences between the EU and India also pose impediments. The FTA could help India converge to international trade norms over time.

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    of 15

    EU-India FTA

    POTENTIAL BENEFITS POTENTIAL COST

    Relatively easy to negotiate Trade diversion


    • Little sectoral overlap on trade structures
    • Share of India in the trade of the EU is low • India has average applied MFN
    • Share of EU in the trade of India is high tariffs on goods of 16%
    but declining • India increasing its imports from
    Potential for 30% increase in each way
    the EU but at the expense of more
    flows of bilateral FDI as a direct result efficient suppliers from third
    of signing an FTA countries
    • Impediments relate to procedural issues,
    labour laws, levels of corruption and Structural and policy impediments
    overlapping jurisdictions • Different policies and procedures
    at the state level
    FTA could eventually help India
    converge to international norms Anti-dumping policy could
    undermine the benefits of a FTA
    India – EU Trade Data

    Trade in goods
    – EU goods exports to India 2009: €27.5 billion
    – EU goods imports from India 2009: €25.4 billion

    Trade in services
    – EU services exports to India 2009: €8.6 billion
    – EU services imports from India 2009: €7.4 billion

    Foreign Direct Investment


    – EU outward investment to India 2009: €3.2 billion
    – Indian inward investment to EU 2009: €0.4 billion
    Various Economic Groups
    Advantage Regional Grouping
    • Local inefficiencies are removed: Opening up of the domestic economy
    to competition
    • Trade creation: Substitution of inefficient domestic production by cheaper
    imports from another country
    • Optimum utilization of resources: Each country specializes according to
    its relative comparative advantage
    • Less dependence on domestic demand while setting new new industry

    Disadvantage Regional Grouping


    • Seven of the following 10 imported consumer products are subject to customs duty rates of
    35% or higher.
    • Bottled water (HTS code 2201.90.10) … 35% of imports’ declared value
    • Cell phones (8517.19.90) … 25%
    • Computer parts and accessories (8473.30.10) … 15%
    • Flu medicine (3002.20.00) …35%
    • Hard cheese (0406.90.00) …40%
    • iPad (8471.30.00) … 15%
    • Perfume … (3303.00.00) … 35%
    • Running shoes (6404.11.00) … 35%
    • Shaving cream (3307.10.00) … 35%
    • Sunglasses (9004.10.00) … 35%.
    •
    Read more at Suite101: Indian Customs Duties on Consumer Goods Imported into India
    http://www.suite101.com/content/indian-customs-duties-on-consumer-goods-imported-into-india
    -a272462#ixzz1CMP5Rjjx
    • http://trade.ec.europa.eu/doclib/docs/20
    07/june/tradoc_135112.pdf
    • http://www5.cao.go.jp/98/e/19980416e-
    gurovari-e.html
    • http://www.citeman.com/2698-benefits-a
    dverse-effects-and-implications-of-regio
    nal-economic-groupings/
    • http://www.suite101.com/content/indian-
    customs-duties-on-consumer-goods-im
    ported-into-india-a272462
    European Union
    • History:
    • 1 January 1973 : Denmark, Ireland and
    the United Kingdom join the European
    Union on, raising the number of
    member states to nine.
    • 1990-1999: With the collapse of
    communism across eastern Europe
    joins in. Freedom of : movement of
    goods, services, people and money.
    . EU - grouping/impact/change in trade
    practices and affect to others
    • Impact:
    • Greece is pulling the EU down- Debt interest spiral
    • 60% of the debt of Greece, Spain and Portugal is held by French
    and German banks
    • Advantage Germany :
    – Germany's highly competitive industrial machine is able to export its
    goods and services to other European countries that cannot
    competitively devalue against Germany.
    – Germany is further boosted by global exports as the Euro is KEPT
    Relatively WEAK against its major export markets such as the United
    States.
    – A survey estimates german currency would have doubled in value in
    the present if it werent under common Euro
    The crisis is bigger than
    Greece

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