India and EU Set Sights on Free Trade Agreement Revival

The winds of change are blowing as India and the European Union’s chief negotiators sit at the table once more to iron out the contours of a proposed free trade agreement (FTA). With talks resuming on Monday, both parties are poised to finalize the first phase amidst an unpredictable global trade environment. This move marks a significant step forward after years of stagnation.

Bridging the Divide: A Renewed Effort

The negotiations, stalled for over eight years, were re-energized in June 2022. The revival signals a refreshing commitment to bridging past differences, primarily revolving around market openness. Chief negotiators have realigned focus to ensure key issues align with mutual economic aspirations. As stated in NDTV Profit, this methodical approach reflects India’s strategy, similar to its dealings with Australia and the United States.

Two Phases, One Goal

India and the EU have decided to tackle the agreement in two phases. The first part aims to address convergent issues – those that both parties are already aligned on. These are expected to include critical discussions on market access in goods, services, and investment, as well as government procurement. According to Commerce Secretary Sunil Barthwal, prioritizing core elements is imperative. “First things first,” he remarked, emphasizing the significance of initial stages that could yield swift impactful benefits.

Strengthening Competitiveness: A New Horizon for Indian Exports

The successful conclusion of the FTA could significantly bolster Indian exports to the EU, making goods like pharmaceuticals, steel, petrochemical products, and textiles more competitive. With the EU accounting for about 17% of India’s total exports, strategically reducing duties on automobiles, medical devices, and other consumer products has been a point of emphasis. This is in line with the EU’s demands for a more robust intellectual property climate and food-related tax reforms.

Comprehensive Scope: The Policy Landscape

This agreement is multilayered, encompassing 23 distinct policy areas from Sanitary and Phytosanitary Measures to Trade Defence and Government Procurement. Notably, intellectual property rights and sustainable development chapters underscore the broad scope, aiming for a comprehensive overhaul that aligns with global standards.

Future Pathways: Post-Agreement Expectations

With India’s bilateral trade in goods with the EU hitting $137.41 billion in the fiscal year 2023-24, the FTA is poised to unlock further opportunities for both sides. The anticipated agreement will be accompanied by investment protection and geographical indications, further safeguarding the flourishing trade partnership.

The negotiations, set to continue until May 16, reflect optimism and preparedness from both sides. Minister Piyush Goyal’s discussions with EU leaders highlight India’s unwavering effort to propel the talks forward, all eyes squarely fixed on a year-end resolution. The path to enhanced economic relations is being paved, promising a robust future for both Indian and European markets.