India and the EU on Friday agreed to give each other “real additional” market in services in the proposed FTA and retain flexibility for Indian pharmaceuticals to export off-patent drugs as provided in a WTO agreement.

The Bilateral Trade and Investment Agreement (BTIA), expected to be concluded in the few months, seeks to open bilateral commerce not only in merchandise but also in services like insurance.

Faced with economic troubles, the 27-nation EU bloc has been wanting India to liberalise its insurance sector and open the multi-brand retail to foreign investment.

Liberalisation in these two areas are among the key demands of the European Union.

“The EU and India agree that the final outcome should provide real additional market opportunities for both sides. This will be reflected in offers which will be exchanged by early date,” a joint report on the state of play of negotiations for BTIA said.

The joint report was presented to Prime Minister Manmohan Singh and European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso at the EU-India Summit in Brussels.

It said the good progress has been reached on reducing tariffs and the revised offers would give advantage to India.

It was made clear that India’s concerns on flexibility to its USD 22 billion pharmaceutical industry should be addressed.

The Trade Related Intellectual Rights (TRIPS) agreement of the World Trade Organisation (WTO), provides right to member countries to manufacture and export off-patent generic drugs.

However, the EU had been demanding that a stricter regime be applied in the India-EU bilateral pact.

The Indian industry was opposed to this demand and the government had assured them that the domestic policy space would not be compromised.

Pledging to speed up the negotiations to conclude them in the spring of 2011, the report said “both sides have agreed to intensify work on all pending areas and meet at the chief negotiators level on at least a monthly basis”.

The areas on which consensus is yet to emerge relate to environment, transparency and government procurement.

The EU is facing pressure from some of its members to include environment related issues in the trade agreement, which India is resisting.

The joint report said that the final outcome would address concerns of the two sides.

“Discussions on sustainable development are ongoing to identify the basis for agreement on the this issue taking in to the account the interest and concerns of the both the sides,” it said.

Farmers, traders to be protected in India-EU trade pact: PM

Agreeing to resist protectionism in global trade, India and the EU today announced reaching the final stage of a trade and investment opening pact, billed as one of the largest bilateral agreements.

On concerns that the Broad Based Bilateral Trade and Investment Agreement (BTIA) with the 27-nation EU could hurt the interests of Indian farmers and traders, Prime Minister Manmohan Singh said the pact would have enough safeguards to protect them.

“There are concerns among small farmers and shopkeepers. I am confident we will build enough safeguards to protect their essential interests,” Singh said at a joint news conference, along with the European Council President Herman Van Rompuy and the European Commission President Jose Manuel Barroso at the end of a day long EU-India Summit.

A joint declaration issued afterwards said that the two sides “agreed on the contours of a final package, and reaffirmed the importance of an ambitious and balanced” conclusion of BTIA to enhance their about Euro 56 billion bilateral trade.

The leaders decided to speed up negotiations so that BTIA could be concluded in the spring of 2011.

“We are at the last stages of this complex exercise. We have directed our officials to redouble their efforts to reach a conclusion by the spring of 2011. Finalisation of a balanced agreement will bring enormous benefits to both sides,” Singh said.

He further said that the two sides should take lead in avoiding protectionist trends, keeping markets open and encouraging the free flow and movement of people.

India has concerns over restrictions of movement of people in several European countries like the UK and Germany.

It’s apprehensions were partly addressed in the joint statement.

“Recognising the important implications of the movement of people for India and EU, they (leaders) agreed to explore initiatives that could lead to a regular, comprehensive and structured dialogue on migration issues, with a view to deepening cooperation in this field,” it said.

Recalling the G-20 commitment for concluding a multilateral trade opening deal under WTO, the statement said the leaders “affirmed their commitment to resist all forms of protectionist measures”.

Indian trade in goods and services has been facing protectionist measures like seizure of off-patent generic drugs in some European countries and restrictions on professional visas in the US.