India is currently engaged in advanced discussions with both the European Union (EU) and the United States (US) to finalize trade agreements, according to recent statements by Commerce Minister Piyush Goyal. These negotiations aim to strengthen economic ties and address existing trade imbalances.
Goyal recently met with European trade negotiators in Brussels from October 26-28. He noted substantial progress in the talks with the EU, stating that 10 out of 20 chapters of the Free Trade Agreement (FTA) have been finalized. Additionally, another four to five chapters have been broadly decided in principle. The EU trade negotiators are expected to visit New Delhi for further discussions. Both sides have expressed a commitment to addressing each other's concerns and reaching a mutually beneficial agreement. Contentious issues remain, including the EU's safeguard duty on steel, India's high tariffs on automobiles, and the carbon emission levy. Goyal commented positively on the Carbon Border Adjustment Mechanism (CBAM), a levy on imported goods based on their carbon emissions.
The Commerce Minister emphasized that India is keen to conclude the FTA with the EU, which provides a stable market for Indian merchandise exports. In the last financial year, India's exports to the EU totaled $82 billion, slightly less than the $86.5 billion in exports to the US. While Goyal did not specify a deadline for finalizing the agreement, he expressed optimism that it would be concluded at the earliest, preferably by the end of the year. He stressed that securing a "good deal" is more important for India than adhering to any specific deadline, indicating a focus on the quality and balance of the agreement.
In parallel to the EU talks, trade discussions between India and the US are also progressing positively. However, Indian products face significant import duties in the US, with tariffs reaching as high as 50%. New Delhi considers these tariffs unfair, and discussions are underway to resolve these trade matters. Goyal has stressed the need for export diversification, considering the current geopolitical environment and the high tariffs imposed by the US on several Indian products. He has urged the industry to focus on diversifying export markets and has reviewed FTA talks with the EU, Chile, and New Zealand.
The ongoing negotiations reflect India's proactive approach to strengthening its trade relationships with key global partners. By addressing trade barriers and fostering mutually beneficial agreements, India aims to enhance its economic growth and global competitiveness.
