India and the EU are negotiating a free trade agreement (FTA) with a goal to conclude by year-end. Key discussions involved enhancing economic ties, with both sides prepared for the tenth negotiation round in March. The agreement aims to strengthen trade, particularly amidst concerns regarding U.S. tariff policies. Increased trade and investments are anticipated as a result of the FTA, benefiting both economies.
India and the European Union (EU) are actively discussing how to expedite negotiations for a free trade agreement (FTA), with both parties aiming to finalize the deal by year-end. Recently, Commerce and Industry Minister Piyush Goyal met with EU Commissioner for Trade and Economic Security Maros Sefcovic in Mumbai to facilitate progress towards a balanced and mutually beneficial agreement.
During their discussions, Mr. Goyal remarked on the importance of accelerating efforts to forge a robust economic partnership between India and the EU. On February 28, Prime Minister Narendra Modi and European Commission President Ursula von der Leyen reaffirmed their commitment to achieving the long-anticipated FTA this year, especially amidst rising concerns regarding U.S. tariffs under President Donald Trump.
The two sides are preparing for the tenth round of negotiations for the FTA, scheduled from March 10-14 in Brussels. Strengthening economic ties between India and the EU is increasingly critical given the current uncertainties in the global economy. India, anticipated to grow at 6.4% in 2024-2025, is positioned as the fastest-growing major economy.
India and the EU resumed FTA negotiations in June 2022 after an eight-year hiatus due to market access disagreements. The EU is demanding significant reductions in tariffs on automobiles and alcoholic beverages, as well as stricter protections for intellectual property rights. Concurrently, India seeks data security status for its IT sector, which has been a barrier to the flow of sensitive information crucial for its technology industry.
In the fiscal year 2023-24, bilateral trade in goods between India and the EU reached $137.41 billion, marking the EU as India’s largest trading partner for goods. The EU accounts for approximately 17% of India’s total exports, while 9% of EU exports are directed towards India. Additionally, the estimated bilateral trade in services was approximately $51.45 billion in 2023.
This FTA aims to enhance trade and investment flows between India and the EU. The negotiations include the FTA, an investment protection agreement, and a geographical indications agreement. The EU’s investments in India, valued over $117 billion, with around 6,000 companies, further underscore the partnership, while Indian investments in the EU stand at around $40 billion.
In conclusion, the ongoing discussions for a free trade agreement between India and the EU highlight the urgency and importance of deepening economic relations. With commitments from both sides to finalize the agreement by year-end, the FTA is expected to facilitate increased trade, bolster investments, and create a more favorable environment for both economies. This partnership represents a significant opportunity amidst a global landscape influenced by varying trade policies.
Original Source: www.thehindu.com
