New Delhi/Brussels: After a 9-year lull, India and the European Union (EU) have re-launched negotiations for a Free Trade Agreement (FTA) with each other. The earlier negotiations were left off in 2013 due to differences in the scope of the deal and expectations from it.
In a joint event held at the Headquarters of the European Union (EU) yesterday, Union Minister for Commerce and Industry, Consumer Affairs and Food & Public Distribution and Textiles, Piyush Goyal, and Valdis Dombrovskis, Executive Vice-President of the European Commission formally re-launched the India-EU FTA negotiations.
Besides, negotiations were also launched for a stand-alone Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement.
It may be mentioned that in the India and EU Leaders’ Meeting held in Porto on May 8, 2021, an agreement was reached for resuming negotiations for a balanced, ambitious, comprehensive and mutually beneficial FTA and starting fresh negotiations on the IPA and a separate agreement on GIs.
The Delhi visit of the European Commission President Ursula von der Leyen in April 2022, and the Prime Minister Narendra Modi’s recent visit to Europe accelerated the FTA discussions and helped in defining a clear roadmap for the negotiations, the Indian Ministry of Commerce & Industry stated in New Delhi today.
According to the Ministry, this would be one of the most significant FTAs for India as the EU is its second-largest trading partner after the US.
The India-EU merchandise trade has registered an all-time high value of USD 116.36 billion in 2021-22 with a year-on growth of 43.5%. India’s export to the EU jumped 57% in FY 2021-22 to $65 billion. India has a surplus trade with the EU.
Both sides are aiming for the trade negotiations to be broad-based, balanced and comprehensive, based on the principles of fairness and reciprocity. There will also be discussions on resolving the Market Access Issues which are impeding the bilateral trade.
While the proposed IPA would provide a legal framework for cross-border investments to enhance the confidence of investors, the GI pact is expected to establish a transparent and predictable regulatory environment, to facilitate the trade of GI products including handicrafts and agri-commodities. Both parties are aiming to negotiate all three agreements in parallel and conclude them simultaneously. The first round of negotiations for all three agreements will be held from June 27 to July 1, 2022, in New Delhi.
Considering that both partners have similar fundamental values and common interests and are two of the largest open market economies, the Indian side feels that the trade deal will help to diversify and secure the supply chains, boost economic opportunities for their businesses, and bring significant benefits to the people.
India earlier this year had concluded FTAs with Australia and the UAE in a record time. The FTA talks with Canada and the UK are also underway.
The FTA negotiations are part of India’s broader strategy to forge balanced trade agreements with key economies and revamp existing trade pacts to improve trade and investment.
– global bihari bureau
