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

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 underbanked regions and groups of people in India. This first part of the paper is based on research by K. Singh, India-EU free trade agreement - Should India open up banking sector? (Madhyam, 2009).1 Since the financial and economic crisis has highlighted the fact that liberalised and deregulated financial services have damaging effects on a country, this also papers analyses how free trade agreements potentially reinforce rather than mitigate those trends