India and the EU are expediting free trade agreement negotiations, with a year-end deadline set for finalization. Discussions led by Commerce Minister Piyush Goyal and EU Commissioner Maros Sefcovic took place in Mumbai, emphasizing the need for a mutually beneficial pact amid global economic uncertainties. The two sides aim to enhance trade relations, with a scheduled round of negotiations in Brussels soon.
On March 1, 2025, India and the European Union (EU) engaged in discussions aimed at expediting the negotiations for a free trade agreement (FTA) before the year-end deadline. The meetings were convened between India’s Commerce and Industry Minister Piyush Goyal and EU Commissioner for Trade and Economic Security Maros Sefcovic in Mumbai, with officials from both sides in attendance.
Minister Goyal emphasized, “Our discussions focused on accelerating efforts towards a balanced and mutually beneficial free trade agreement. Looking forward to deepening economic ties and fostering a prosperous India-EU partnership,” highlighting the importance of this agreement.
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen recently committed to finalizing the long-awaited trade deal amid concerns regarding U.S. President Donald Trump’s tariff policies. The next round of negotiations is scheduled to take place from March 10-14 in Brussels.
Elevating economic relations between India and the EU is critical due to potential tariff increases from the United States. With India being the fastest-growing major economy, it is projected to grow at 6.4% in 2024-25, making this agreement even more vital.
After a hiatus of over eight years, negotiations resumed in June 2022 as talks had previously stalled in 2013 over market access disagreements. Key EU demands include significant duty reductions in automobiles and tax cuts on wines and spirits, along with a robust intellectual property framework.
The successful conclusion of the agreement would enhance the competitiveness of Indian exports, such as ready-made garments and pharmaceuticals, within the EU market. Furthermore, India seeks recognition for data security in the IT sector to facilitate sensitive information flow crucial for its booming IT industry.
India’s bilateral trade in goods with the EU totaled $137.41 billion in 2023-24, comprising $75.92 billion in exports and $61.48 billion in imports, establishing the EU as India’s largest goods trading partner. The EU accounts for approximately 17% of India’s total exports.
Additionally, the trade in services between India and the EU was valued at $51.45 billion in 2023. The ongoing negotiations involve not only the FTA but also investment protection and geographical indications agreements to further enhance bilateral trade and investment.
The EU’s investments in India exceed $117 billion, with around 6,000 European companies operating in India, while India’s investments in the EU stand at about $40 billion.
In conclusion, the continued discussions between India and the EU regarding the free trade agreement signify a pivotal step towards strengthening economic ties amidst the backdrop of global trade uncertainties. As both parties work towards addressing key issues such as tariffs and market access, the anticipated agreement holds the potential to significantly boost bilateral trade and investment. The commitment from leaders on both sides reflects their determination to foster a prosperous partnership moving forward.
Original Source: www.thehindu.com
