A month after saying that India needs to create reciprocal global standards and criticising Europe for its “impossible” standards that work as non-tariff barriers, Commerce and Industry Minister Piyush Goyal said that India is hopeful of working with the European Union towards a free trade agreement. This could possibly start with a preferential trade agreement, he said.

Goyal further said that despite the COVID-19 lockdowns, India’s information technology sector served businesses in Europe without any interruption. Thus, “India can be the trusted partner to move away from single source supply chains”, he said, while speaking at a session on EU-India Collaborative Economic Growth on October 7.

India’s renewed focus on becoming an integral part of global supply chains

In June, the Ministry of Electronics and Information Technology announced three schemes, with a total outlay of ₹50,000 crore (~$6.82 billion), to encourage domestic manufacturing. Under one of the schemes — the Production Linked Incentive (PLI) Scheme) —, MEITY, on October 6, approved 16 electronics companies. These include three companies that manufacture iPhones — Foxconn, Wistron, Pegatron —, and Samsung. As a result, these companies along with a host of domestic mobile phone makers (including Lava and Micromax) will get 4-6% in incentives on their incremental sales until 2025.

To ease manufacturing, in August 2019, the government had relaxed local sourcing FDI norms for single brand retailers in a bid to revive economic growth. Thus, single brand retailers are no longer required to locally source 30% of goods and are now allowed to sell their goods online for up to two years before opening brick and mortar stores. As a result of this change, Apple had announced in February 2020 that it would open a physical store in India in 2021. Apple launched its online store in India on September 23.

From a tariff and free trade perspective, in September, Goyal had simultaneously emphasised on the need to remove non-tariff barriers such as quality control orders and standards, and on the need for Indian government to introduce quality control orders. At the time, he had said that European standards on certain products are practically impossible to meet and have hurt Indian MSMEs.

Data is a sovereign asset: India’s stance on data

India and the EU had decided to “enhance convergences” between their regulatory frameworks for data protection and privacy at the 15th India-EU Summit on July 15, 2020. These convergences could include data adequacy decisions that would enable cross border data flows between them.

As of now, India’s data protection legislation is being deliberated upon by a Joint Parliamentary Committee. In its current form, the Personal Data Protection Bill does not meet the adequacy standards laid down within the EU’s General Data Protection Regulation (GDPR) primarily because of two reasons — requirement to mirror and localise sensitive and critical personal data, and lack of independence of the Data Protection Authority.

At the G20 trade ministers meeting in 2019, Goyal had argued against using free trade to justify the free flow of data. India had eventually refused to sign the Osaka Declaration on Digital Economy that propagated the idea of data free flow with trust (DFFT), that is, elimination of restrictions on cross-border electronic transfer of information and data storage in foreign servers.

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