Despite BTIA, India won’t allow EU firms to open stores in India

While government has resumed negotiations to sign Bilateral Trade and Investment Agreement (BTIA) with the European Union (EU), India has however said that the agreement would not allow European retail firms to open stores through multi-brand retail here. Negotiations between the two over BTIA or free trade agreement (FTA), had begun in 2007 but has missed its deadline twice.

The Bhartiya Janata Party (BJP) in its manifesto had voiced opinion against opening multi-brand retail sector to foreign direct investment (FDI). The pro-business BJP government has welcomed FDI in other sectors, but not in retail. India allowed FDI in multi-brand retail in 2012, however the final decision of allowing a foreign retailer in a particular state to the state governments. Also 30 percent mandatory sourcing from SMEs and other such issues had discouraged foreign retail giants eyeing to step into the lucrative Indian market.

The next round of talks on the BITA will take place on August 28 between India’s chief negotiator J S Deepak, Additional Secretary (trade policy division) in the commerce department and EU’s chief negotiator Ignacio Garcia Bercero, who is also spearheading the talks for Transatlantic Trade and Investment Partnership (TTIP).