New Delhi: India and the European Union (EU) have commenced crucial talks to address outstanding issues in the proposed Free Trade Agreement (FTA), with the aim of meeting the end of 2025 deadline. A senior team of EU negotiators arrived in New Delhi on November 3rd for negotiations scheduled to last until November 7th. The Ministry of Commerce and Industry stated that these engagements are aimed at resolving key issues and advancing the agreement towards a balanced and equitable framework that benefits both parties.
These discussions follow Commerce and Industry Minister Piyush Goyal's visit to Brussels from October 26-28, where he engaged in forward-looking discussions with European Commissioner for Trade and Economic Security, Maroš Šefčovič. These consultations reaffirmed both sides' commitment to intensifying engagement and facilitating a comprehensive trade agreement.
During the week-long negotiations, core areas of focus will include trade in goods and services, rules of origin, and technical and institutional matters. Both sides are guided by a shared vision of a modern, robust, and future-ready FTA that reflects the priorities and sensitivities of both India and the EU.
Negotiations between India and the EU have gained momentum, highlighted by a virtual meeting on November 3rd between Minister Goyal, Commissioner Šefčovič, and Agriculture & Food Commissioner, Christophe Hansen. Sabine Weyand, Director-General for Trade at the European Commission, is also scheduled to hold high-level talks with India's Commerce Secretary, Rajesh Aggarwal, on November 5-6 to discuss key technical and policy issues.
Significant progress has already been made, with 10 out of 20 chapters of the agreement finalized and another 4 to 5 chapters broadly decided. Both teams are reportedly moving towards convergence on an increasing number of issues. The EU team's visit to New Delhi signals a commitment to make substantial progress towards closure.
However, some sensitive issues remain on the table. These include the EU's concerns about automobiles and beverages, and India's concerns regarding steel, automobiles, carbon tax or CBAM (Carbon Border Adjustment Mechanism), and other EU regulations. Both sides have agreed to continue discussions on these matters, recognizing the need for a balanced and equitable agreement that respects each other's sensitivities.
Minister Goyal has emphasized the importance of preferential treatment for India's key demands, particularly those related to labor-intensive sectors. Both sides are working to finalize non-sensitive industrial tariff lines. India is also seeking redressal of tariff and non-tariff barriers and the creation of transparent and predictable regulatory frameworks to boost bilateral trade.
The EU is India's largest trading partner in goods, with bilateral trade reaching $137.5 billion in the 2023/24 fiscal year, marking a nearly 90% increase over the past decade. The FTA aims to deepen trade and investment ties, with both sides initially aiming to conclude talks by the end of the year. While Minister Goyal has stated that a "good deal" is more important than meeting deadlines, both sides are optimistic about reaching a mutually beneficial agreement soon.
The India-EU FTA holds significant importance in the context of evolving global trade dynamics. With rising global protectionism and uncertainty in other trade corridors, a comprehensive FTA between India and the EU would send a powerful signal of cooperation. The EU views this as an opportunity to access the world's most populous country and a rapidly growing middle class, while India seeks better access to European capital, advanced technology, and protection for its local industries.
