India, EU To Resume FTA Talks Starting Monday, Finalise The Initial Phase Of The Agreement

From India’s standpoint, finalising the trade deal would provide a competitive edge to exports in key sectors such as pharmaceuticals, garments, petroleum products, steel, and electrical machinery.

India and the EU resumed FTA negotiations in June 2022 after a hiatus of more than eight years.

Source : ABPLIVE AI

The next round of negotiations between India and the European Union (EU) for a free trade agreement (FTA) is set to begin on Monday in New Delhi, as both sides move toward finalising the initial phase of the much-anticipated pact. A senior official confirmed that the talks will span six days, concluding on May 16.

Given the uncertainties in the global trade landscape, exacerbated by past US tariff measures introduced under President Donald Trump, the two sides have opted to conclude the agreement in two stages. The first phase will include areas where both parties have found common ground, while the remaining issues will be tackled in the second phase, which is expected to wrap up by the end of the year.

Focus on Market Access and Early Gains

The current round marks the 11th in the series of negotiations and follows substantial discussions during the tenth round, which concentrated on market access in goods and services, investment flows, and government procurement mechanisms. Commerce Secretary Sunil Barthwal  emphasised the need to prioritise critical trade areas. “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,” Barthwal said.

India has previously adopted a similar phased approach while negotiating trade agreements with Australia and is applying the same model in discussions with the United States.

On May 10, Barthwal chaired a review meeting with top officials involved in the FTA talks, in preparation for this latest round of discussions.

Key Sectors and Trade Potential

The EU’s negotiating agenda includes steep tariff reductions on key products such as automobiles, medical equipment, wines, spirits, meat, and poultry. Additionally, Brussels is pushing for a robust framework on intellectual property protection.

From India’s standpoint, finalising the trade deal would provide a competitive edge to exports in key sectors such as pharmaceuticals, garments, petroleum products, steel, and electrical machinery. This is particularly significant given that the EU is India’s largest trading partner for goods. In 2023-24, bilateral goods trade stood at $137.41 billion, with Indian exports at $75.92 billion and imports from the EU at $61.48 billion.

The EU currently accounts for approximately 17 per cent of India’s total exports. Conversely, goods exports to India represent about 9 per cent of the EU’s total global exports. Beyond goods, the bilateral services trade reached $51.45 billion in 2023.

A Renewed Push After an Eight-Year Pause

India and the EU resumed FTA negotiations in June 2022 after a hiatus of more than eight years. The talks had originally stalled in 2013 due to disagreements over market liberalisation levels. Since restarting discussions, both parties have broadened the scope of the agreement, which now spans 23 chapters, including Trade in Goods and Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Defence, Customs, Competition, Intellectual Property Rights, Government Procurement, and Sustainable Development.

High-level engagement has underpinned recent progress. On May 1, Commerce and Industry Minister Piyush Goyal visited Brussels to evaluate the agreement’s advancement. Earlier, on February 28, Prime Minister Narendra Modi and the President of the European Commission reaffirmed their commitment to finalise the FTA by the end of 2025.

Alongside the FTA, India and the EU are also negotiating an investment protection agreement and a separate agreement on geographical indications (GIs).

As momentum builds, the progress of the India-EU trade deal could significantly reshape bilateral economic relations in the years to come—especially at a time when India is deepening its global trade engagements, including its recent conclusion of a free trade deal with the UK on May 6.