Next week marks a significant development in India-EU trade relations as Maros Sefcovic, the European Commissioner for Trade, arrives in New Delhi from September 11. This visit comes amid promising progress in the negotiations for a long-awaited Free Trade Agreement (FTA) between India and the European Union. Indian Trade Minister Piyush Goyal announced this update during an interview with India Today, underlining the importance of the talks which aim to conclude by the end of 2025.
Key Highlights of the Announcement:
The visit of EU Trade Commissioner Maros Sefcovic coincides with the ongoing 13th round of FTA negotiations in New Delhi, scheduled to start from September 8.
These discussions represent a pivotal moment in the India-EU trade relationship, aiming to finalize the agreement by year-end.
The India-EU trade talks resumed in 2021 after nearly an eight-year hiatus and have since made rapid progress.
Bilateral trade between India and the EU stood at $137.5 billion in the fiscal year 2023/24, nearly a 90% increase over the last decade.
Primary negotiation issues include the EU's call for tariff reductions on vehicles, medical equipment, wine, spirits, and dairy products, while India seeks better access for textiles, pharmaceuticals, steel, and petroleum products.
Both parties reaffirm their political commitment to accelerating the FTA conclusion, highlighted during recent conversations between Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen.
India-EU Trade Talks: Context and Significance
After years of stalled negotiations dating back to 2013, India and the EU resumed comprehensive trade discussions in 2021. The current round represents the most advanced phase, with expectations to finalize the agreement within 2025. The renewed momentum reflects mutual recognition of the economic and strategic importance of deepening this partnership amid global economic uncertainties and geopolitical challenges.
The EU is India’s largest trading partner in goods, and the deepening of trade ties is crucial for both economies. The FTA aims to reduce tariffs and regulatory barriers, promote investment, and enhance cooperation in technology, sustainability, and standards. For India, this agreement is part of a broader strategy to diversify trade partnerships and secure improved market access for its exports.
Major Negotiation Points
Tariffs: The EU is pressing for significant tariff cuts on automobiles, dairy, and medical devices. India is simultaneously advocating for tariff concessions for its key sectors such as textiles, pharmaceuticals, steel, and petroleum products.
Regulatory Standards: The EU is pushing for higher environmental, labor, and product standards as part of the agreement, which poses a challenge for India to balance trade liberalization with domestic policy autonomy.
Geopolitical and Strategic Cooperation: Beyond trade, the partnership seeks to align on broader geopolitical objectives, including economic security and climate protection.
Investment and Services: Discussions also cover rules around investments and service trade to stimulate cross-border commerce and investment flows.
Political Momentum and Future Outlook
The commitment to conclude the deal by the end of 2025 was reconfirmed during high-level dialogues between Prime Minister Narendra Modi and Ursula von der Leyen. Both leaders emphasized swift progress as essential in remaining competitive globally. The EU Trade Commissioner’s visit will likely involve consultations with Indian ministers and stakeholders to resolve remaining technical and political barriers.
India is also leveraging diplomatic support, notably from Germany, to facilitate expedited negotiations and strengthen ties with the EU. The intent is to enable a commercially meaningful deal that opens markets and supports the competitiveness of Indian industries.
In summary, the forthcoming visit of the EU Trade Commissioner to New Delhi is a critical juncture for India-EU trade relations. It embodies the drive to transform a protracted negotiation into a landmark free trade agreement that benefits both parties economically and strategically, setting the stage for enhanced economic cooperation in the Indo-Pacific and beyond.
Source: Reuters, India Today, Press Information Bureau (PIB) India, Economic Times
