India, EU to hold next round of FTA talks from May 12
The two sides have agreed to conclude the agreement in two phases on account of the uncertain global trade environment, particularly due to the US tariff actions under President Donald Trump
New Delhi: India and the European Union (EU) chief negotiators will begin the next round of talks on the proposed free trade agreement (FTA) here from Monday, with an aim to conclude the first phase of the pact as early as possible, according to an official.
The two sides have agreed to conclude the agreement in two phases on account of the uncertain global trade environment, particularly due to the US tariff actions under President Donald Trump.
“The EU team will be here for the 11th round of negotiations. It will continue till May 16,” the official said. Issues where there is convergence would be included in the first part of the agreement. They are aiming to conclude the second part by the end of this year. Talks for the previous (tenth) round focused on areas like market access offers in goods, services, investment and government procurement.
India has followed the practice of negotiating trade pacts in two phases with Australia. It is following a similar approach to the US. Commerce Secretary Sunil Barthwal last month stated that “if some of the issues which may not be very core to the trade, maybe taking some more time, then it is better to focus on core trade issues. So, we say that first things first…We are also discussing with the EU what can be the early harvest of the first tranche, where we can do faster”. The secretary, on May 10, held a review meeting on the pact with senior officials who are involved in the negotiations.
Besides demanding significant duty cuts in automobiles and medical devices, the EU wants tax reduction in products like wines, spirits, meat, poultry and a strong intellectual property regime.
Indian goods’ exports to the EU, such as ready-made garments, pharmaceuticals, steel, petroleum products, and electrical machinery, can become more competitive if the pact gets concluded successfully.
On May 1, Commerce and Industry Minister Piyush Goyal was in Brussels to discuss progress on the agreement. In June 2022, India and the 27-nation EU bloc resumed negotiations after a gap of over eight years. It was stalled in 2013 due to differences over the level of opening up of the markets.
On February 28, Prime Minister Narendra Modi and the European Commission President agreed to seal a much-awaited free trade deal by the end of this year. The India-EU trade pact negotiations cover 23 policy areas or chapters, including Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, Trade Defence, Government Procurement, Dispute Settlement, Intellectual Property Rights, Geographical Indications, and Sustainable Development.
India’s bilateral trade in goods with the EU was USD 137.41 billion in 2023-24 (exports – USD 75.92 billion, imports – USD 61.48 billion), making it the largest trading partner for goods.
The EU market accounts for about 17 per cent of India’s total exports, while exports to India make up 9 per cent of its total exports. In addition, the bilateral trade in services, in 2023, between India and the EU was estimated at USD 51.45 billion.
The two sides are negotiating a free trade agreement, an investment protection agreement and an agreement on geographical indications (GIs). India and the UK announced on May 6 the conclusion of the negotiations for a free trade deal.
