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Formation of European Union has a drastic effect on India’s trade
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The European Union (EU) operates through a system of supranational institutions and intergovernmental negotiated decisions by member states. Basically EU is a politico-economic union of 28 member states. These states have a geographical position in and around Europe. The institutions are: the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, the European Central Bank, the Court of Auditors, and the European Parliament. The European Parliament is elected every five years by EU Citizens. Since the formation of European Union (EU) the global economy has had rippling effect. Indian economy at the same time was trying to make foothold in various economic zones and countries. So let us see what kind of effect happened on India’s trade after the formation of European – bad or good. So we will have points for or against the fact that European Union formation has drastic effect on India’s Trade.

For
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1.With India’s attempt to find out a good equation with our biggest partners USA, UK and Germany failing badly, formation of European Union has only deteriorated the situation. 

2.EU – India trade talks began well in June 2007. India’s rapidly expanding role in world economy as a buyer and seller make this an important free trade agreement for the EU.
 
Against
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1.The EU – India negotiations began well in June 2007. But the hard issues are always left to last in such discussions. The benefits of an agreement for the two nations are especially hard to quantify given importance that each places on hard-to-measure gains in areas like investment and services.

2.The EU would mean more exposure to a more stable currency vis-à-vis the presently volatile dollar tranche; this would mean healthier earnings and repatriation.
 
Conclusion
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India’s rapidly growing and expanding role in the world economy as a buyer and seller make this an important target for EU. It would be an agreement well worth having. Of course, such bilateral progress should come in addition to, rather than in place of progress in the WTO’s current multilateral talks (The Doha Round) but such progress depends only partly on the EU’s stance. From the Indian side, the free trade agreement would be a move from its reliance on a unilateral liberalization policy with extreme reluctance to commit multilaterally.

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