India aims to conclude a free trade agreement with the European Union by the end of this year. Prime Minister Narendra Modi discussed this initiative with Ursula von der Leyen, the EU chief, highlighting opportunities in various sectors such as defense, agriculture, and clean energy. The EU seeks to lower trade barriers while India aims for increased investments and mobility for skilled labor.
New Delhi (AFP) – India is set to finalize a mutually beneficial free trade agreement (FTA) with the European Union (EU) by the end of this year, as announced by Prime Minister Narendra Modi following his meeting with Ursula von der Leyen, the EU chief. “We have asked our teams to work out a mutually beneficial bilateral free trade agreement by the end of this year,” remarked Modi in New Delhi.
Ursula von der Leyen, who is visiting India for two days with a team of commissioners, aims to strengthen trade relations against the backdrop of deteriorating ties with the United States. She expressed optimism about yielding fruitful negotiations, stating, “We have tasked our teams to build on this momentum and finalize our FTA before the end of the year.”
The EU ranks as India’s largest trading partner, with trade in goods amounting to €124 billion ($130 billion) in 2023, representing over 12% of India’s total trade. Opportunities for trade cover a vast array of sectors, including defense, agriculture, automobiles, and clean energy, even though the EU’s current market share in India is just 2.2% due to protected high tariffs.
The EU seeks reduced entry barriers for its automobiles, spirits, wines, and other products while India is looking for increased EU investments in clean energy, urban infrastructure, and water management sectors. Additionally, India has emphasized the need for improved mobility for its skilled workforce and further investments.
In light of rising geopolitical tensions, Von der Leyen highlighted the potential for a Security and Defence Partnership with India, akin to existing agreements with Japan and South Korea. “This will help us step up our work to counter common threats, whether on cross-border terrorism, maritime security threats, cyber-attacks or the new phenomenon we see: attacks on our critical infrastructure,” she stated.
As both nations discuss strategies to bolster supply chains, India is enticing businesses looking to divest from China with incentives like tax breaks and simplified investment regulations. Creating sufficient job opportunities for its vast and growing workforce presents a significant challenge for Modi’s administration.
While discussions included defense collaborations and naval exercises, the ongoing conflict in Ukraine and its implications were also on the agenda. However, the official statement from von der Leyen did not explicitly address this matter. Despite Western pressure, India has maintained its relations with Russia, which continues to supply military equipment.
Following their meeting, Modi remarked that India and the EU share a mutual understanding regarding the peace and stability of the Asia-Pacific region. He underscored the significance of this meeting, stating it sets a foundation for future collaboration in trade, technology, security, and innovation.
In summary, India and the EU are advancing towards a free trade agreement by year-end, focusing on enhancing bilateral trade relations while addressing mutual economic interests. The discussions encompass a broad range of topics, from defense cooperation to strategies for managing the impacts of global geopolitical shifts. This engagement marks a pivotal step in the evolving dynamics between India and the EU as they aim to harness opportunities across various sectors.
Original Source: www.rfi.fr
