New Delhi: The much-delayed negotiations for the proposed free trade agreement between India and the EU are unlikely to conclude this year due to persisting differences over several issues such as opening up of the services sector and level of duty cuts in the automobile segment.

"I do not expect the agreement to be concluded this year since there are still some critical aspects (issues) under negotiations," Indo-German Chamber of Commerce (IGCC) Director General Bernhard Steinreucke said in an email interview.

Germany is the largest trading partner of India in the 27-nation European Union (EU).

The pact, officially dubbed as Bilateral Trade and Investment Agreement (BTIA), seeks to liberalise trade in goods and services.

The negotiations for the pact, which started in June 2007, has missed several deadlines. These talks were to conclude in 2011, but differences between the two sides on the level of opening of the market came in the way of the BTIA.

The pact that will provide for liberalising trade in services, an area of strength for India, faces hurdles like visa problems in several EU member countries such as Germany and Britain.

The two sides also have differences on matters like level of duty cut in wines and spirit, inclusion of intellectual property rights and data security in the pact.

"In the automobile industry and imports of wine (by India) there are some issues," Steinreucke said.

In a meeting yesterday with Algirdas Semeta – European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud -- Commerce and Industry Minister Anand Sharma expressed his disappointment over EU's stand of not giving data secure status to India.

The country has time and again said that without this status, it would be difficult for New Delhi to further proceed for the BTIA negotiations.

However, Steinreucke hoped that the negotiations for the agreement may be concluded by next year.

"With lower tariffs and better access, the EU-India free trade agreement will certainly increase the trade between our two countries," he said.

The country and its largest trading partner EU aim to slash duties on over 90 per cent of the trade under the pact.

The two-way trade increased to USD 110.26 billion in 2011 from USD 83.37 billion in 2010.


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