India-EU FTA: PM Modi conveys concerns on ban of 700 drugs

New Delhi: Prime Minister Narendra Modi Monday conveyed India's concerns to German Chancellor Angela Merkel over banning of over 700 drugs two months back and asked her to use her influence in EU to remove the impediments for resumption of FTA talks with the 28-member bloc.

After talks between Modi and Merkel, Foreign Secretary S Jaishankar said there was an understanding that "we would go forward with negotiations" though there was an issue of India's pharmaceutical exports getting affected.

He was replying to a question on whether the issue of resumption of FTA negotiations was discussed in talks between the two leaders.

"The Prime Minister urged the Chancellor to use her influence to ensure that the right decision was made by the regulators in this regard," he said,

The Foreign Secretary said there were a number of sticky issues in negotiations for FTA talks which include data security.

"We are also aware that the restrictions which have been placed on the sale of about 700 odd drugs from India which in our views was unwarranted. It was an obstacle to the negotiations moving forward. It was a subject of discussion today," said Jaishankar.

"It was our hope that this matter would be looked at fairly and sensibly and hopefully would not be an impediment to the FTA," he said.

Jaishankar said the issue was raised by Modi when he met leaders of European nations in New York last week.

India in August had deferred scheduled talks on the proposed pact later this month which was to resume after a gap of two years after the EU imposed a ban on around 700 generic drugs which were clinically tested by India's GVK Biosciences on the ground of inaccuracy in data.

The talks on FTA are stuck on sticky issues relating to intellectual property rights (IPR), data security for IT services and tariff in the automobile sector. The last round of talks on the FTA was held in May, 2013.

The EU has been maintaining that it was ready to show flexibility on all major issues that have stalled the talks as the FTA will be a "win-win deal" for both the sides.

The EU was also looking at insurance, banking and retail as major areas for economic engagement with India.

Launched in June 2007, negotiations for the proposed FTA have witnessed many hurdles as both the sides have major differences on crucial issues.

Besides demanding significant duty cuts in automobiles, the EU wants tax reduction in wines, spirits and dairy products, and a strong intellectual property regime.

On the other hand, India is asking for granting 'data secure nation' status to it by the EU. The country is among nations not considered data secure by the EU.