All in favour? Indian business interests and the India-EU FTA

Abstract

Negotiations between the European Union (EU) and India regarding a free trade agreement (FTA) have been hindered by numerous difficulties and disagreements since they began in 2007. A few studies have pointed at various key points of contention, including inter alia tariffs on sensitive products, intellectual property rights, trade in services, and chapters on non-trade issues. Despite a long-standing body of research into the ways in which interest groups, particularly business interests groups, influence economic policymaking and the outcomes of trade negotiations, the preferences of interest groups — especially on the Indian side — have been largely overlooked in the context of the FTA negotiations. This is reflective of a general lack of research on preferences toward trade agreements of interests groups in the Global South. In this paper, I analyse the preferences toward the agreement of India’s most influential chamber of commerce: the Federation of Indian Chambers of Commerce and Industry (FICCI). The analysis shows that, since the start of negotiations, FICCI’s perception of the FTA has been deeply ambivalent and the policy preferences of the chamber are not likely to be met by an FTA between the EU and India. Additionally, the chamber’s preferences toward certain chapters of the agreement, particularly toward the key issues, may limit Indian negotiators’ ability to compromise, with several potential implications for the final agreement.