India and the EU have a better understanding of each other’s ambitions and sensitivities and there is a no doubt that there’s a lot to gain on both sides from the proposed bilateral free trade agreement (FTA), according to Maroš Šefčovič, European Commissioner for Trade and Economic Security.

“We have agreed to focus our attention on building a commercially meaningful market access package in industrial goods and services. We are aiming for a win-win outcome that supports our two economies in developing clean tech supply chains that will be fit for decades to come,” said Šefčovič following a two-day high-level trade and investment dialogue with Commerce Minister Piyush Goyal in Brussels over the weekend.

We have discussed that we will respect each other’s levels of economic development going forward, and come up with fair solutions for mutual benefit, Goyal said in his statement.

“We have addressed several areas that in the past looked difficult to overcome. We are looking at simplification of process, finding cost competitive ways to expand trade for the benefit of our businesses, especially MSMEs, farmers and fishermen,” Goyal said.

Last month, after Šefčovič and Goyal met virtually, the Commerce Ministry had issued a statement pointing out that following nine rounds of intensive negotiations, the FTA discussions required strategic political guidance to conclude a commercially significant and mutually beneficial agreement, with due consideration given to each side’s sensitivities.

The Brussels meeting was a step forward in that direction. “We have given political direction to both our teams to come up with a consequential, viable and outcome-oriented agreement between the two countries,” Goyal said.

While the average tariffs in the EU bloc of countries are much lower than in India, the non-tariff barriers are high. New Delhi has been emphasising on the need to bring down non-tariff barriers because an FTA with the bloc would be useful to Indian exporters and lead to increased market access only if these are lowered.

The positive outcomes for EU-India trade talks in Brussels include a shared political objective to take partnership to a new win-win level and identify the path forward for an ambitious trade & investment package, Herve Delphin, EU’s Ambassador to India, posted on social media platform X on Monday.

He also noted that both sides had agreed to increase the pace of negotiations for the India-EU FTA.

The FTA talks between India and the EU first began in 2007, but reached a stalemate in 2013 over issues such as market access for specific goods, specifically automobiles and wines and spirits. The talks were re-started in 2022 but are facing issues in several areas, including rules of origin (ROO), which determine the national source of a product. 

The main areas of negotiations include tariff reductions, improving market access for goods and services, protecting intellectual property, enhancing trade in services, protecting investments, government procurement, sustainability issues, including environmental and labour standards, data protection and data flow, ROO, harmonising regulations and standards and establishing mechanisms to resolve trade disputes.

Published on January 20, 2025