India-EU FTA talks: Why resolving differences in services is a significant step forward
The digital trade chapter of the FTA discussions covers crucial segments such as cross-border data flows, where trade partners decide on commitments to regulate movement of data across borders, which is important for e-commerce and global services.
To be sure, the textual positions taken by both sides have not yet been made public. However, bridging the regulatory gap in services between India and the EU would open the door for the Indian services sector to integrate more deeply, scale up, and attract greater investment. This is important since the EU is the largest investor globally, and services represent over 70 per cent of the EU's foreign direct investment (FDI) abroad.
According to a 2021 European Parliament report, the EU aimed to remove all 'discriminatory and disproportionate obstacles to establishment in both the services sector, as well as to the supply of cross-border services, in order to ensure a level playing field between EU and Indian service providers'. India has a fast growing IT and financial service sectors that has acted as a cushion for the economy as goods trade remained modest compared to the size of the economy.
Regulations on cross-border data flows are among the most contentious topics in trade agreements with the Western countries, especially with the rise of artificial intelligence (AI). Effective AI systems — seen as the cornerstone of the Fourth Industrial Revolution — require diverse datasets from multiple countries. This has sparked a fierce race for data among Silicon Valley firms.
India has traditionally resisted altering its stance on data localisation under any plurilateral agreements at the World Trade Organization (WTO) to preserve policy space. It has also tightened norms, notably in April 2018, when the Reserve Bank of India (RBI) made it mandatory for payment system providers such as Mastercard and Visa to store payment data of Indian residents within the country.
A 2018 UNCTAD report, Power, Platforms, and the Free Trade Delusion, highlighted the importance of data for innovation. It noted that control over data creates 'market power and barriers to entry for new players'.
The UN Conference on Trade and Development (UNCTAD) also highlighted the potential benefits of data localisation, including encouragement to foreign investment in domestic digital infrastructure, enabling enforcement of national laws, as well as safeguarding privacy and cyber sovereignty. Countries such as Vietnam and the Philippines have implemented such measures to promote local capabilities and protect infant industries.
The EU status report on the trade talks also stated that negotiators made substantial progress on the investment text. The negotiators had made very good progress on rules for state-to-state mediation, it added. Movement on dispute settlement is significant since it suggests a breakthrough on long-standing EU concerns regarding investment protection in India.
A European Parliament report had previously expressed regret that 'uncertainties remain for EU investors, notably as a result of India's decision to unilaterally terminate all its bilateral investment treaties (BITs) in 2016'. However, India has since begun to address the issue by negotiating new investment treaties under a revised framework.
While India has shown flexibility in its position, favouring resolution of investor-state disputes under domestic laws, the EU has stated that an investment protection agreement could serve as an 'adequate stepping stone for further strengthening bilateral trade relations,' as it encourages negotiators to work towards establishing a multilateral investment court.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
14 minutes ago
- India.com
Noel Tata's mega plan, this company eyes Rs 70000000000 value of…, from ‘Aashiyana' in…
Tata Steel plans to double the gross merchandise value (GMV) of its homebuilding e-commerce platform 'Aashiyana' to about Rs 7,000 crore in FY 2025-26, a senior company official said. For the first time, the steel giant is also exploring the addition of non-Tata Steel products to broaden its range of offerings, the official added. 'All of the GMV on 'Aashiyana' currently comes from Tata Steel products, but we do plan to expand our offerings in the near future,' Tata Steel VP (Long Products) Ashish Anupam told PTI. Tata Steel Eyes Rs 7000 Crore GMV The platform recorded a GMV of Rs 3,550 crore in 2024-25, registering a 60 per cent year-on-year growth, and with the rollout of 'Aashiyana 3.0' – the newly launched version of the platform Tata Steel expects to double the GMV over the next one year, he said. Initially launched as a transactional e-commerce site, 'Aashiyana' has now evolved into a full-fledged content-to-commerce ecosystem designed specifically for individual home builders (IHBs) – a largely unorganised but significant segment of India's construction market, officials said. 'With 'Aashiyana', we are not just digitising the buying process, we are empowering individual homebuilders to make confident, informed decisions from blueprint to brick,' Anupam said. What Aashiyana Offers? The steel company said its upgraded platform offers over 300 curated home design plans, budget calculators, planning tools and AI-powered product recommendations. It also provides access to stage-by-stage construction guides, educational content across 31 topics, and omnichannel support through WhatsApp and chatbots. The platform has crossed 1.1 lakh registered users and seen strong uptake from the Indian diaspora. Orders have been placed from customers across 24 countries, led by the US, UAE and the Netherlands, the officials said. 'There's a growing interest among NRIs to build homes back in India for their families. 'Aashiyana' allows them to remotely plan and procure materials with greater confidence for their requirement back home,' he said. By offering tools such as material estimators, document vaults and visual inspiration boards, Tata Steel is aiming to position 'Aashiyana' not just as a commerce platform but as a homebuilding advisor, Anupam said. (With Inputs From PTI)
Mint
14 minutes ago
- Mint
Stocks to buy for short term: From Titan to HCL Tech— Jigar Patel of Anand Rathi recommends 3 shares
Stocks to buy for the short term: Since July, the Indian stock market has been under pressure due to persistent worries over Trump's tariffs, heavy foreign capital outflow, and lacklustre Q1 earnings. Last week, the Nifty 50 fell by a per cent, extending losses to the sixth consecutive week. The index is now down 1.6 per cent in August so far, after falling 3 per cent in July. While FPIs' selling and a 50 per cent tariff imposed by US President Donald Trump kept the mood sombre, the Reserve Bank of India's status quo on interest rates did not offer any relief. On Friday, August 8, the index closed at 24,363, falling below the crucial support of 24,450. Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, pointed out that the Nifty 50 is now eyeing the 24,000–23,800 zone. This range holds significance as it coincides with the 200-day exponential and simple moving averages, both key long-term support indicators. According to Patel, positive divergence in the RSI on intraday charts, along with the daily RSI nearing its support zone, hints that the correction may be approaching its final leg. "For a recovery to take shape, the Nifty must decisively reclaim 24,600 — the recent swing high. Such a breakout could open the path towards 24,800–25,000. Until then, traders are advised to keep positions light and avoid aggressive bets," said Patel. Jigar Patel recommends buying shares of Titan, HCL Tech, and BPCL for the next two to three weeks. Titan has found support at a confluence of crucial technical levels, raising the likelihood of a short-term recovery. Shares of Titan Company have rebounded from a falling trendline, the 0.50 Fibonacci retracement, and the combined backing of the 100-day and 200-day exponential moving averages (DEMA). This convergence of support reflects strong buying interest in the current range. The Relative Strength Index (RSI) has displayed a hidden bullish divergence, signalling underlying strength despite recent price weakness. "We suggest accumulating Titan in the ₹ 3,475– ₹ 3,425 zone for an upside target of ₹ 3,750, with a stop-loss below ₹ 3,300 on a daily closing basis," said Patel. Titan technical chart HCL Technologies has witnessed a sharp correction of around 300 points, or 17.15 per cent, from its recent peak near ₹ 1,740. Over the past seven to eight sessions, the stock has consistently held near the 0.618 retracement level, which also coincides with the gap formed on April 22–23, 2025. Prices are trading well below the 100- and 200-day exponential moving averages, indicating the potential for a mean reversion. On the daily charts, the RSI is forming a complex 'W' pattern below the oversold threshold of 30, while bullish divergence is visible on the hourly chart. These technical cues suggest a possible rebound. "We recommend accumulating the stock in a staggered manner within the ₹ 1,480– ₹ 1,450 zone, targeting ₹ 1,600. A protective stop-loss should be maintained below ₹ 1,400 on a daily closing basis," said Patel. HCL Tech technical chart BPCL has recently found strong support, aligning with multiple technical indicators. The price has rebounded from a key trendline, the 0.382 Fibonacci retracement level, and the 100-day exponential moving average (DEMA), all converging to reinforce this support zone. Additionally, the RSI has formed a hidden bullish divergence, indicating that underlying momentum is improving despite recent price weakness. This setup suggests a favourable risk-reward scenario for short-term traders. "We recommend buying BPCL stock in the ₹ 320– ₹ 315 zone, aiming for an upside target of ₹ 350. To manage risk effectively, a stop-loss should be placed below ₹ 300 on a daily closing basis," Patel said. BPCL technical chart Read all market-related news here Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
&w=3840&q=100)
Business Standard
14 minutes ago
- Business Standard
Tata Motors targets cut as Q1 miss, tariffs, weak demand weigh on outlook
Analysts on Tata Motors Q1 results: Automaker Tata Motors ' June quarter (Q1FY26) performance has prompted brokerages to lower their target prices and maintain a cautious stance, citing a combination of weaker-than-expected earnings, tariff challenges at Jaguar Land Rover (JLR), muted demand in key markets, and headwinds across its domestic businesses. The company's consolidated Ebitda for the quarter fell 35 per cent year-on-year (Y-o-Y) to ₹9,720 crore, missing estimates due to a steep drop in Jaguar Land Rover (JLR) profitability and pressure on the India passenger vehicle (PV) segment. JLR revenues declined 9.2 per cent to £6.6 billion, with Ebit margin shrinking to 4 per cent, as new US trade tariffs on UK- and EU-produced vehicles, along with planned Jaguar model phase-outs, hit volumes and margins. Track Stock Market LIVE Updates Brokerages weigh in Nuvama Institutional Equities flagged the sharp miss in JLR and India PV earnings, reducing its FY26E/FY27E Ebitda estimates by 6-7 per cent. 'Tata Motors' Q1FY26 Ebitda fell 35 per cent Y-o-Y to ₹9,720 crore (estimate: ₹9,970 crore) led by a 46 per cent drop in JLR due to weak volumes, US tariffs and forex losses. India PV Ebitda fell 36 per cent Y-o-Y due to lower scale, higher discounts and transition to new models,' the brokerage said. The brokerage now builds in a revenue/Ebitda CAGR of 5 per cent/4 per cent over FY25–28E, projecting muted JLR volume growth of just 1 per cent CAGR due to the discontinuation of Jaguar models, weak China/Europe sales, and persistent US tariffs. Analysts also expect subdued performance in India's commercial vehicle (CV) business – 1 per cent CAGR – on a high base, with competition from rail freight weighing on demand. 'Retain 'Reduce' with a Sep-26E TP of ₹610 (earlier Mar-26E ₹670),' the report said. On the other hand, Motilal Oswal Financial Services (MOFSL) noted that while the India CV segment delivered relatively strong performance, both JLR and India PV segments 'face severe headwinds.' It cut its target price to ₹631 from ₹668 and maintained a 'Neutral' rating. The brokerage cited 'weak demand outlook across business segments' and highlighted that JLR is grappling with tariff uncertainty for US exports, weak demand in Europe and China, and rising variable marketing expenses (VME), warranty provisions, and emission-related costs. MOFSL expects margin pressure for JLR to persist, factoring in a 150 bps Ebit margin decline over FY25–27E. Jefferies reportedly was the most bearish among the three, maintaining its 'Underperform' rating while lowering its target price to ₹550 from ₹600. It called the June quarter a 'big miss' and noted that Ebitda had fallen to a 10-quarter low. The brokerage warned of 'multiple headwinds across businesses,' particularly for JLR, which is facing increased competition and consumption tax in China, higher warranty costs, and the ongoing transition to battery electric vehicles (BEVs). It also flagged that key JLR models are 'starting to age,' potentially impacting competitiveness in the luxury segment. Tariff relief ahead, but recovery to be gradual While the recently signed UK-US trade deal – cutting tariffs on UK-produced vehicles exported to the US from 27.5 per cent to 10 per cent effective June 30, 2025 – and the EU-US deal to reduce tariffs on EU-produced vehicles to 15 per cent offer some relief, brokerages believe the benefits will only start to meaningfully reflect in the coming quarters. For now, all three brokerages expect the near-term to remain challenging for Tata Motors. JLR's transition away from legacy Jaguar models, rising input and compliance costs, and soft demand in China and Europe are expected to weigh on volumes and margins. In India, the PV segment is dealing with industry softness, model changeovers, and heightened discounting, while CV demand faces base effects and structural competition from rail transport. Despite management's optimism for a stronger second half – supported by festive season demand and the October 2025 demerger – the Street remains cautious. As Nuvama summed up, 'muted growth expectations and persistent headwinds across businesses warrant a conservative stance.'
