Source:The Hindu Business Line
India and the European Union (EU) are moving rapidly forward with negotiations to agree a free trade agreement (FTA). Commerce and Industry Minister Piyush Goyal met in Brussels with European Commissioner for Trade Maros Sefcovic on May 23. This was their second meeting in less than a month.
Goyal was coming from Washington, while L. Satya Srinivas, India’s chief negotiator was already at EU headquarters with his negotiating team. The discussions are focused on an early agreement before transitioning to a comprehensive trade deal.
Leaders Stress Continued Progress
Sefcovic welcomed Goyal with a post on X (formerly Twitter), saying: “Delighted to welcome my friend and counterpart @PiyushGoyal. We continue to make progress. Let’s maintain the momentum – with hard work, clear focus – and I look forward to our next meeting soon,”
In response, Goyal, in a post on the social media platform, said, “We remain committed to the shared prosperity of India and the EU. Let us keep this pace going!”.
On May 16, both parties held the 11th round of dialogue in New Delhi. Officials say they are hoping to reach an “We are looking for an early harvest. We are trying to do it as early as possible,”
What the Early Deal Could Include
The early agreement may include topics like:
- Intellectual property rights (IPR)
- Government purchases
- Import and export taxes
- Non-tariff rules (such as product standards)
The EU is looking for reductions in import duties on cars, medical devices, wines, spirits, and meat, and it is also working to strengthen intellectual property rights. On the other side, India is trying to protect its own local dairy industry. In this context, India has raised concerns over the EU planned carbon tax and the likely impact on some categories of Indian exports.
Why the Agreement Matters
The EU is the largest trading partner of India in terms of goods. In 2023-24, trade between the two was $137.41 billion. India exported $75.92 billion worth of goods and imported $61.48 billion during this period. Services trade was estimated $51.45 billion in 2023.
If the agreement is concluded, Indian exports including textiles, medicines, steel, petroleum products, electrical items etc could be more competitive in the European market .
Background
India and the EU restarted FTA talks in June 2022 after almost a 9-year hiatus. Negotiations saw suspension due to disagreements regarding opening up markets in 2013. In Feb 2023, Prime Minister Narendra Modi and the European Commission President agreed to try and finalise by the end of 2025. The comprehensive agreement is expected to cover 23 subject areas including goods, services, investment, rules of origin, dispute resolution, sustainable development etc.
Going Forward
India and the EU now have the common two-phased approach of (1) first finalizing the early deal, and (2) then supporting the complete FTA. Both parties believe this agreement will facilitate their economic partnership and mutual benefit to people and businesses in each territory.
