EU and India to become trade partners before 2024 polls

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After more than eight years of stalled negotiations on a comprehensive EU-India trade agreement, the two are set to formally restart talks from mid-June to strike an agreement before both head to the polls in 2024.

Technical negotiations on 18 chapters of a future free trade agreement, one text regarding investment issues, and one concerning geographical indications are set to begin on 17 June in Brussels, India’s commerce ministry said in a statement.

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“Both sides hoped to agree in 2024. The pact will pave the way for India to boost trade with the 27-member nation EU bloc, subject to ratification by both sides, including the European Parliament,” the statement said.

The renewed talks are expected to focus on industrial goods, agricultural tariffs and services, access to each other’s markets for goods and services, public procurement contracts, rules on intellectual property, and commitments on sustainable development issues such as environmental, social, and labour rights.

Although India’s population of nearly 1.4 billion makes for an attractive potential market, trade between the EU and India has historically been low, with trade in goods reaching a total of €88 billion in 2021 and trade in services totalling €30.4 billion in 2020.

The EU is India’s third-largest trading partner, after the US and China, while Delhi is only number ten on the list of the bloc’s most important trade partners, measured by the value of traded goods and services.

But expectations on both sides diverge on issues such as tariffs on cars, wines, and dairy products imported from the EU and on visa liberalisation for Indian professionals entering the EU.

She said that tariffs might not be very high in other sectors, but other taxes make it hard for European companies to compete in India.

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But according to her, the juxtaposition of the free-trading EU and protectionist India made it difficult to find common ground between 2007 and 2013 when trade talks started, and ambitions were deemed too far apart.

“Due to the variety of interests of EU member states, only a very comprehensive deal removing a large part of the tariffs and other trade barriers and covering services and digital trade as well as other areas such as sustainable development and SMEs is likely to find agreement among member states,” an EU official held during an interview.

 

 

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