Synopsis
On March 10, India and the EU will commence the next round of trade talks aimed at finalizing a free trade agreement by year-end. This initiative follows discussions between PM Modi and EU President Von der Leyen, emphasizing the need for mutual concessions and cooperation in various sectors.Key Takeaways
- Next round of India-EU trade talks starts March 10.
- Aiming to finalize the free trade agreement by year-end.
- Significant concessions needed on both sides.
- Focus on market access and trade barrier removal.
- India is the EU's ninth largest trading partner.
New Delhi, March 9 (NationPress) India and the European Union are set to initiate the next phase of discussions for a proposed free trade agreement (FTA) on Monday in Brussels, with the objective of finalizing the agreement by the end of this year, as confirmed by a senior official.
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen reached a consensus to accelerate the completion of the India-EU FTA during their meeting in Delhi last month.
"A free trade agreement between the EU and India would represent the largest deal of its kind globally. While I recognize the challenges ahead, I am convinced that timing and resolve are crucial, and this partnership is timely for both sides," stated Von der Leyen during her recent two-day visit to India.
This statement comes amid significant tariff increases proposed by US President Donald Trump under his 'America First' policy, which poses a risk to global trade and increases uncertainty in the world economy.
PM Modi and the European Commission President have tasked their negotiating teams to actively pursue talks aimed at achieving a balanced, ambitious, and mutually advantageous FTA. They emphasized the importance of working as trusted partners to enhance market access and eliminate trade barriers. Additionally, they were directed to progress discussions on an Agreement on Investment Protection and an Agreement on Geographical Indications.
However, finalizing a deal will be intricate, as both sides demand substantial concessions on various issues, including automobiles, whisky, pharmaceuticals, and textiles.
The EU seeks lower tariffs from India on cars, wine, whisky, and certain agricultural products. Conversely, India is aiming for enhanced market access and reduced tariffs on essential exports such as pharmaceuticals, textiles, and apparel.
The EU is India’s primary trading partner, responsible for 124 billion euros worth of goods trade in 2023, constituting 12.2 percent of India’s total trade. Trade in services between the EU and India approached 60 billion euros in 2023, nearly double the levels seen in 2020. A significant portion of this trade was in digital services, based on data from the World Economic Forum.
In comparison, the US and China account for 10.8 percent and 10.5 percent, respectively, of India’s total trade. Meanwhile, India ranks as the EU’s ninth largest trading partner, making up 2.2 percent of the bloc’s overall trade, according to WEF statistics.
Trade between India and the EU has surged by approximately 90 percent over the last decade; however, negotiations for a free trade agreement have faced hurdles due to significant differences between India and the 27-nation bloc concerning agriculture, automobiles, and pharmaceuticals.
