India-EU FTA: Policy Implications of Unfettered Investment Flows

By Kavaljit Singh | Briefing Paper # 2 | June 2011

The European Commission (EC) is seeking an expansive mandate to negotiate on investment issues on the behalf of the European Union. In its recommendations to the European Council, the EC sought modifications in the negotiating directives for the proposed free trade agreement with India. If these recommendations are accepted, the EC would pursue comprehensive cross-border investment liberalization and investment protection provisions under the trade agreement with India. The EC document calls for the “progressive abolition of restrictions on investment, with the aim to ensure the highest level of market access.”

The EC recommendations contain several alarming proposals which should receive public scrutiny both in Europe and…

India-EU FTA: Rethinking Banking Services Liberalization

By Kavaljit Singh | Briefing Paper # 1 | March 2011

One of the major underlying themes in the ongoing negotiations on India-EU FTA is the liberalization of trade and investment in banking services. With the help of FTA with India, EU is seeking greater market access and export gains for its banks through cross-border
supply and direct investments. Some of the key demands emanating from Europe include removal of all barriers to market access (commercial presence, cross-border supply and consumption) and grant of national treatment commitments. The EU banks and powerful lobby groups such as European Services Forum (ESF) have put forward a slew of demands including removal of all restrictions pertaining…

Rethinking Liberalisation of Banking Services under the India-EU Free Trade Agreement

By Kavaljit Singh and Myriam Vander Stichele | SOMO Paper | September 2009

The European Union (EU) and India are negotiating a free trade agreement (FTA) which encompasses liberalisation and deregulation of financial services. This paper wants
to raise policy issues that run much deeper than the current liberalisation debate and consider who will benefit and who will lose from the FTA. This paper first looks at the performance of EU banks in India, especially as compared to the developmental needs of the un-banked and under-banked regions and groups of people in India.

Since the financial crisis has highlighted the fact that liberalised and deregulated…

Entry of Foreign Banks in India and China: A Brief Note

By Kavaljit Singh | Discussion Paper | March 2006

The proponents of banking sector liberalization claim that the entry of foreign banks in the poor and developing world is highly desirable and beneficial. But recent empirical evidence suggests that the entry of foreign banks could lead to misallocation of credit, which in turn could negatively affect economic growth prospects as bank credit is a vital input for investment and growth. As the focus of the global banking industry appears to be on India and China, this note analyses some of the recent developments taking place in these countries.

Banking Sector Liberalization in India: Some Disturbing Trends

By Kavaljit Singh | September 2005

In the first week of August 2005, Reserve Bank of India (RBI), country’s central bank, issued a list of 391 under-banked districts in India with population per branch more than the national average of 16,000. The list was part of a policy directive issued by the central bank to all commercial banks asking them to work out their branch expansion strategies “keeping in mind the developmental needs of un-banked regions.” If 391 districts out of a total 602 districts in India are un-banked and under-banked, it raises several policy…