Broad-based Trade and Investment Agreement (BTIA): Notes for IAS Exams

The trade agreements between India and the European Union are some of the many current affairs topics that candidates attempting the IAS Exam must be well-versed with. This article will give details of one of these agreements – the BTIA (Broad-based Trade and Investment Agreement).

What is the BTIA?

The BTIA broad trade arrangement covers many factors of trade in goods, services, and investment. India is one of the EU’s important, if not the largest, trading partners due to the fact that India accounted for 13.5% of total trade in 2015-2016. Thus the BTIA is important for both the EU and India.

Both India and the European Union have been negotiating the Broad-based Trade and Investment Agreement for decades. The negotiations include many factors such as tariff reductions, market access and investments. The last rounds of negotiations happened in November 2013 and ever since then, the negotiations have been stonewalled. LAtest events like the Brexit and terminations of other overseas investment treaties might have a direct impact on the BTIA and negotiations are likely to resume in the becoming years.

BTIA – UPSC Notes:- Download PDF Here

Latest Context on Broad Trade & Investment Agreement – BTIA

  1. India and the European Union (EU) may announce some progress in negotiations relating to a broad-based trade and investment agreement during the India-EU summit scheduled for 8 May 2021.
  2. India and the European Union (EU) held their 15th “annual” summit in July 2020. The summit was held after two years due to disagreements over trade and investment that define their bilateral ties.

Key Points of the Summit

  1. A Roadmap to 2025, a common roadmap to guide joint action and further strengthen the Strategic Partnership over the next five years has been endorsed between India and EU.
  2. India and the European Union both are “unions of diversity”, sharing values of democracy, rule of law and human rights. Both are equally convinced of the necessity to preserve the rules-based international order and effective multilateralism.
  3. India and European Union can contribute jointly to a safer, cleaner, and more stable world. Since, Both have a common interest in each other’s security, prosperity, and sustainable development.
  4. India and European Union had launched talks for having a wide-ranging Free Trade Agreement (FTA), officially called broad-based Bilateral Trade and Investment Agreement (BTIA), long ago in 2007.
  5. India and the EU have agreed to launch a high-level trade dialogue to foster progress on “balanced, ambitious and mutually beneficial” trade and investment agreements, address trade irritants and discuss supply chain linkages.
  6. A civil nuclear cooperation agreement was signed between the European Atomic Energy Community or Euratom and the Department of Atomic Energy, India that will focus on research and development cooperation for peaceful and new uses of nuclear energy.
  7. To scale up defense and security ties, discussion on the launch of a new maritime security dialogue, Consultations on crisis management and EU’s counter-piracy military operation in the western Indian Ocean were included.
  8. India’s Central Bureau of Investigation (CBI) and Europol launched negotiations to combat organized crime and terrorism.

Issues involved in India- EU Summit

  • India’s recent Atma Nirbhar Bharat Abhiyaan was viewed by the EU as an initiative that might lead to protectionism. Read in detail about the AtmaNirbhar Bharat Abhiyan on the linked page.
  • The EU has been critical over the removal of Article 370 in Jammu and Kashmir as well as the Citizenship Amendment Act, which according to India is an internal matter. Further details on Citizenship Amendment Act – CAA 2019 on the linked page.
  • The European Union is critical about India’s“protectionist” measures on tariffs and the termination of bilateral investment treaties with 25 EU member states.

Read the details of the India-European Union Summit on the given page.

Aspirants can check the following links for the comprehensive preparation of the upcoming Civil Services Examination –

Current Scenario of BTIA

The Government of the United Kingdom announced that it will pull out of the European Union in June 2016. The Brexit would be formalized on February 1st, 2020. Before this, the UK was one of the vocal opposition of the BTIA with the focus being on the liberalization of visa rules for Indian workers and reduction of tariffs on spirits. The UK has a substantive interest in both issues as it is opposed to liberal visa rules for Indian skilled labour and wants its whiskey and other spirits to face lower customs duties in India. Since the UK is no longer a part of BTIA talks, it can be taken for granted that the negotiations will be a smooth one

Conclusion

Post-Brexit, the EU will be entering unknown territories and India is renegotiating the RCEP (Regional Comprehensive Economic Partnership (RCEP), which is a partnership of magnanimous proportions with the  Association of Southeast Asian Nations (ASEAN) 

However, the RCEP negotiations are complicated and involve sixteen countries at different levels of progress and with diverging concerns.

Continuing the BTIA talks with the EU will benefit India for the following reasons:

  1. The EU is one of India’s important trading partner thus the benefits outweigh the risks involved
  2. Both the EU and India have robust markets with a large population
  3. If India needs to keep its economic development going then better market access and integration of global logistic chains that the BTIA will offer are key elements

To get more topics to visit the UPSC Syllabus page and for more of UPSC-related preparation materials visit the linked articles:

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