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 wanted India to liberalise its insurance sector and open the multi-brand retail to foreign investment.
Liberalisation in these two areas is 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 here.
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 $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 this issue taking in to the account the interest and concerns of the both the sides," it said.
