Political opposition to EU-India FTA gathers momentum
Online Publication Date: 14 May 2013
opposition to EU-India FTA gathers momentum
New Delhi, 13 May
(Ranja Sengupta) -- Leaders of the main opposition parties in India came
together recently in New Delhi to voice their opposition to the proposed
Bilateral Trade and Investment Agreement (BTIA) between India and the European
In a visibly defiant
display, the politicans asked that the matter be discussed first in the Indian
parliament. They also released the "Delhi Declaration on the EU-India
FTA" which outlined their strong concerns on various aspects of the trade
agreement and their urgent message to the government to put in place certain
safeguards including a parliamentary ratification process for ensuring a fair
and inclusive trade policy that benefits the people of India at large.
The BTIA, or free trade
agreement (FTA) in general terms, has been negotiated since 2007 and concluding
negotiations are expected on 15 May ahead of a Ministerial between the two
sides in June.
Talks now hinge on
issues of automobile tariffs, access for Indian professionals to the EU, data
secure status for India, and India's domestic legislation on raising foreign
direct investment (FDI) limits in the insurance sector.
It is not clear where
talks on agriculture, intellectual property rights and investment, areas of
strong demands by the EU which have seen much opposition by civil society
organisations, are currently poised.
farmers' organisations, civil society organisations (CSOs), patients' groups
and other stakeholders have repeatedly raised concerns about this FTA for some time
India's largest milk
cooperative Amul and the Society of Indian Automobile Manufacturers have
already expressed strong objections to the proposed duty cuts under this FTA.
Major opposition parties have also expressed growing dissatisfaction over the
process of negotiations as well as substantive adverse impacts expected from
In a first of its kind,
at least on FTA issues, senior leaders from the Bhartiya Janata Party (BJP),
Communist Party of India Marxist (CPI-M), Janata Dal United (JDU) and other
Parties joined together to reject the proposed FTA. They unanimously agreed
that not only does this particular FTA undermine the democratic principles of
policymaking in India, it can also have significant adverse impacts on large
constituencies within the country.
The major move came at
a roundtable conference on 3 May, on the "Impact of India-EU FTA on Indian
Economy", organised by the Confederation of All India Traders and the
Forum Against FTAs, a network of about 168 NGOs, farmers' organisations, trade
unions, academics and others.
Speaking on the
occasion, Dr. Murli Manohar Joshi, senior BJP member of parliament and
Chairperson of the Public Accounts Committee (PAC), said that "the secrecy
around these negotiations does not suit the largest democracy of the world. All
such international treaties must be ratified by the Parliament, especially
those that impinge on India's policy space, undermines the powers of the
parliament, alters the federal structure, or tramples upon the fundamental
rights of the people including food security and health".
Dr. Joshi also warned
that "there will be serious political fallout in the country if this FTA
goes through. The 2014 elections will be the acid test for the
The FTA has been criticised
by CSOs and other stakeholders for being conducted in secrecy with no sharing
of negotiating texts or impact assessment studies, either with stakeholders,
state governments or the national parliament.
The President of Janata
Dal (U) and Convenor of the National Democratic Alliance (the opposition
coalition), Mr. Sharad Yadav, said: "this FTA will be against the interest
of India's large majority, the downtrodden and the humble mazdoor, as it will
bring in huge European imports into the country. The government has conspired
with the EU to unleash this FTA on the Indian people".
Mr. Basudev Acharya,
Chairperson of the Standing Committee on Agriculture, and member of CPI-M,
said, "the Committee is seriously concerned and has already called upon
the government not to open up India's dairy sector to EU's heavily subsidised
products under this FTA. We are also looking at other products in agriculture
which will also see unfair competition and will work against India's farmers
and agricultural workers".
leaders such as Sitaram Yechury (CPI-M) and A. B. Bardhan (CPI) sent words of
support and expressed their concerns at the insistence of the EU to impose
damaging provisions on a developing country like India through this FTA.
The roundtable was
attended by more than 100 participants representing experts on trade
agreements, economists, retail traders' organisations, CSOs, trade unions,
farmers' organisations, industry representatives and patient groups.
CONCERNS EXPRESSED BY VARIOUS
Mr. Praveen Khandelwal,
Secretary-General of the Confederation of All India Traders (CAIT), said that
"the very framework of the FTA is flawed and it undermines national
legislative processes by trying to push the Insurance bill to increase FDI cap
from 26 to 49% at the behest of the EU".
Dr. Kavaljit Singh,
Executive Director of Madhyam, a New Delhi-based non-profit organisation
devoted to research and public education on economic and developmental issues,
said that "Under no circumstances should India agree to liberalise the
banking and insurance sectors till the regulatory issues raised by the global
financial crisis are resolved".
Dr. Amit Sengupta from
the International Peoples' Health Movement argued for a "strong stance
against strong enforcement measures suggested in the IPR
rights) chapter by the EU, as this will threaten the very existence of the
generic drug industry and severely undermine access to medicine in India and
"The EU proposals
even suggest bringing third party liability under enforcement, thus potentially
criminalising use of generic medicines by even humanitarian
organisations," he added.
agriculture is being sold out for narrow gains in services, Shri Naresh Sirohi
of Bhartiya Kisan Morcha (a large farmers' organisation in India), argued that
"as long as the EU continues to give agricultural subsidies which cannot
be negotiated under an FTA, India should not even consider bringing agriculture
under the negotiations".
Other farmer leaders
such as Krishna Vir Chaudhary (Bharatiya Krishak Samaj), and Yudhvir Sigh
(Bhartiya Kisan Union) also supported a "no negotiation" stance on
agriculture with developed countries such as the EU which gives huge
agricultural subsidies that cannot be negotiated under an FTA.
Mr. Satish Garg,
National Organising Secretary of CAIT, suggested that it will be suicidal for
the government to agree to the EU's demand to lock in current FDI
liberalisation in retail under this FTA, making any future policy reversal
impossible, especially when a domestic debate on this matter is still ongoing.
The political leaders
pledged to start a Parliamentary Forum on Economic Affairs that will oversee
economic policymaking and ensure critical review of key policies. Their
"Delhi Declaration on the EU-India FTA" contains their strong
concerns and an urgent call to the government to put in place certain
safeguards including a parliamentary ratification process for ensuring a fair
and inclusive trade policy that benefits the people of India at large.
In a series of letters,
the Society of Indian Automobile Manufacturers (SIAM) has for some time,
strongly worded its opposition to proposed duty cuts by 50% on completely built
cars, arguing that this will flood the Indian market with high-value luxury
cars made in Europe and destroy the buoyant but still nascent automobile
industry in India.
In a recently released
White Paper, SIAM also argues that this will undermine the longstanding
government policy of combining high import duties with open FDI policy that
attracted investment in India and will discriminate against non-European
INDIA'S LARGEST DAIRY
COOPERATIVE OPPOSES THE FTA
In a letter to Commerce
Minister Mr. Anand Sharma on 22 March, Amul, India's largest dairy cooperative,
said "the proposed India-EU FTA on Agri/Dairy sector is likely to cause
severe disadvantage to the farmers and consumers of India if the same is agreed
to. We request you on behalf of 80 million farmers that we need to put a
counter case to ensure that the economic and commercial rights of farmers and
consumers are not compromised."
Amul argued that
geographical indication protection and import duty cuts on the EU's subsidised
dairy products will significantly raise India's imports from the EU, affecting
farmers' markets as well as the future processing potential of the country.
Amul is India's first
milk cooperative which revolutionised the milk market in India by involving
small dairy farmers, mostly women, to sell to the cooperative at better rates
and under healthy conditions, spurtring India's "white revolution".
Managed by the Gujarat Co-operative Milk Marketing Federation Ltd., Amul is
jointly owned by three million milk producers in the state of Gujarat.
DISCONTENT FOR SOME TIME
The joint political
position is not the first articulation of such political opposition to the FTA,
though it is definitely a first in its unified approach. While the BJP and the
CPI (M) have issued statements against the FTA in the past, matters escalated
before the visit of Prime Minister Manmohan Singh to Germany around the middle
of April. On 10 April, while the Prime Minister was in Germany talking about
the FTA with German Chancellor Angela Merkel, Dr. Murli Manohar Joshi held a
one-hour press conference to warn the government not to sign the FTA without a
Dr. Joshi had pointed
out that "the UPA (the ruling United Progressive Alliance led by the
Congress party). government is now engaged in the final phase of the
negotiations for the highly controversial Free Trade Agreement (FTA) with the
European Union without taking into account the opposition by several
development experts and many stakeholders. Irrespective of ideological
considerations, the conditions which, according to reports, the UPA government
is willing to concede to EU will seriously jeopardise the interests of the
Indian people with no obvious gains in trade or economic expansion."
He further said that
"once the FTA becomes active, the EU will flood the market with products
in dairy, poultry, sugar, wheat, confectionary, oilseeds, plantation products
and fisheries, some of which are strategic for India. This will directly
compromise India's agricultural sovereignty and its food security. Obviously,
an FTA which talks only about tariffs, and not about trade-distorting tricks
such as subsidies and other incentives is detrimental to our agriculture."
"Another area that
will impact India is opening up of procurement in central and state government
institutions. This is the lifeline of many of Indian industries and medium and
small enterprises, including small businesses run by women and other
disadvantaged communities. If this is opened to the EU, the SMEs (small and
medium sized enterprises) will find it extremely hard to survive," Dr.
He had also raised
concerns regarding intellectual property rights and access to medicines as well
as provisions related to investment protection.
In a statement released
on 5 April, ahead of the Prime Minister's departure for Germany, the Polit
Bureau of the CPI (M) urged the government to "stop this Indo-EU Free
Trade Agreement". It said that "The Communist Party of India
(Marxist) expresses deep concern that negotiations on the Bilateral Trade and
Investment Agreement between the European Union and India, has proceeded
without any due scrutiny by Parliament or other democratic institutions."
The statement further
pointed out that "the agreement is likely to worsen the already burgeoning
current account deficit and trade deficit. Evidence from trade agreements that
India has already entered clearly indicate that they further worsen the
country's trade deficit".
property, investment and government procurement chapters of the agreement will
have a negative impact on virtually every area of economic activity --
including agriculture, industry and services," the statement added.
Not mincing words, the
party stated "the CPI(M) is particularly concerned that the entire
negotiating process has been non-transparent, with a total lack of public
consultation with affected sections, parliamentary oversight, or the
involvement of state governments. Despite repeated expressions of concern by
political parties including the CPI(M), the government has moved forward with
the process, shunning even a modicum of effort to arrive at a political
consensus on the issue. The Parliamentary Standing Committee on Commerce is
examining the impact of FTAs but the government's determination to sign the
EU-India BTIA without waiting for the Committee's report betrays a shocking
disregard for parliamentary democratic institutions."
UNPRECEDENTED SHOW OF
CONCERN BY PARLIAMENTARY COMMITTEES
In significant public
displays of dissatisfaction, two major standing committees of the Indian
parliament have also expressed concerns about the processes and content of the
In an unprecedented
move, the Standing Committee on Commerce, which is currently hearing from the
public on the matter of "India's Engagement with Free Trade Agreements:
Challenges and Opportunities", issued a warning to the Indian government not
to sign the FTA with the EU in the meantime.
public announcement came on 11 April while the Prime Minister and the Commerce
Minister were in Europe. Even more noteworthy was the fact that this statement
was endorsed by each and every member of the 31-member Committee including 12
members from the ruling party and its allies.
Mr. Shanta Kumar, the
chairperson of the Committee, in a strongly worded letter to the Prime
Minister, suggested the signing should wait and "let the committee
deliberate on the issues raised first".
The Hindu, a leading
national newspaper, reported Mr. Kumar as saying, "I have urged him that
serious doubts have been raised over the fallout of the various decisions
likely to be taken in the FTA. We have said the country could continue to
negotiate the FTA but it should refrain from signing it till all doubts are
cleared on protecting of interests of the country".
"There are reports
that the negotiations with EU are all set to be concluded shortly. So the
committee decided unanimously that our concerns should be conveyed to the
Centre (the national Government)," Mr Kumar told leading newspapers.
As the panel is
considering the representations of several industries, non-governmental
organisations and farmers' associations against the FTA, "we felt that the
Government should wait for the Committee's report on the subject, ‘India's
Engagement with Free Trade Agreements: Challenges and Opportunities', before it
proceeds to sign any FTA," Mr. Kumar was reported to have said.
In another development,
the Standing Committee on Agriculture asked the government to protect the
interest of the dairy sector in the FTA negotiations with the EU. "The
Committee desires that the interest of dairy producers in the country which is
paramount be protected from monopolistic, discriminatory and lopsided trade
practices," newspapers quoted.
The parliamentary panel
discussed the issue related to the India-EU FTA while examining the Department
of Animal Husbandry, Dairying and Fisheries' demands for grants for 2013-14
fiscal, and urged the government "not only to ensure a level-playing field
(to the local industry) but also prevail upon the EU to accord concessions for
their (India's) domestic dairy producers." The Committee expressed hope
that the government would take adequate action.
The spate of hitherto
unforeseen expressions of concern by parliamentary standing committees and the
increasing unity of political parties on the proposed EU-India FTA are clear
pointers that there are significant issues which the governments of India and
the EU have failed to take into account.
process issues within India, the EU's persistent demands on a developing
country to liberalise trade and investment in several areas that will also
affect India's domestic policy space including its legislative processes, are
raising increasing political and social opposition, not only in India but
across the world. +- The above report was first published in
the South-North Development Monitor (SUNS) #7583 dated Tuesday 14 May 2013.