The European Union is pushing for relaxed norms for its investors looking to enter the retail sector in India, but the latter seems unlikely to oblige.
Retail sector investors, is now emerging to be the only contentious part of the discussions on a bilateral free trade agreement between India and the EU.
Emboldened by the recent spate of retail sector reforms in India the EU is keen to have fewer restrictions on entry of European investors into India.
Government officials in India however are rather wary of conceding to such demands, reported the Hindu Business Line.
"It was easier to say no earlier when we did not allow foreign investment in multi-brand retail.
"But now with the spate of reforms in retail this year, the pressure on us to include it in the FTA is growing.
"The problem facing the Government is whether politically it could get away with taking on binding commitments in retail especially since opening up the sector has been strongly resisted by Opposition parties as well as allies," the officials admitted.
The free trade pact is worth $200bn and represents a two-fold increase from $110bn during in 2011 with officials wary of upsetting the applecart.
Complicating matters further, the EU is pushing for greater leeway than what has already been proposed in the foreign investment norms.
"India will have to pay heavily in other areas if it includes retail in the agreement and later makes changes in the existing policy," cautioned the official.