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India, EU resumes free trade negotiations after 9-year break

BNE News Desk


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Guwahati: Shri Piyush Goyal, Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles, and Mr. Valdis Dombrovskis, Executive Vice-President of the European Commission, formally re-launched the India-EU Free Trade Agreement (FTA) negotiations at a joint event held at the European Union (EU) Headquarters in Brussels.

Furthermore, discussions for a stand-alone Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement were initiated.

Last year, at the India-EU Leaders' Meeting in Porto on May 8, 2021, an agreement was made to resume discussions for a balanced, ambitious, comprehensive, and mutually beneficial FTA, as well as to begin new negotiations on the IPA and a separate agreement on GIs.

Both parties are currently resuming FTA discussions after a nine-year hiatus since the previous negotiations ended in 2013 owing to differences in the scope and expectations of the agreement.

The European Commission President Ms. Ursula von der Leyen's visit to Delhi in April 2022, as well as Prime Minister Shri Narendra Modi's recent travel to Europe, advanced the FTA discussions and helped define a clear framework for the negotiations.

This would be one of the most important FTAs for India because the EU is its second largest trading partner after the United States. The India-EU goods trade reached an all-time high of USD 116.36 billion in 2021-22, representing a 43.5 percent year-on-year increase. India's exports to the EU increased by 57% to $65 billion in fiscal year 2021-22. India has a trade surplus with the EU.

Given that both partners share similar fundamental values and common interests, as well as being two of the world's largest open market economies, the trade agreement will help to diversify and secure supply chains, increase economic opportunities for our businesses, and provide significant benefits to the people.

Both parties want the trade talks to be broad-based, balanced, and thorough, with a focus on justice and reciprocity. There will also be conversations about how to resolve market access issues that are limiting bilateral commerce.

While the proposed IPA would offer a legislative framework for cross-border investments to boost investor confidence, the GI accord is envisaged to create a clear and predictable regulatory environment to enable trade of GI items such as handicrafts and agri-commodities.

Both parties intend to negotiate all three agreements concurrently and to finalise them all at the same time. The first round of discussions for all three accords will take place in New Delhi from June 27 to July 1, 2022.

India signed FTAs with Australia and the UAE in remarkable speed earlier this year. FTA negotiations with Canada and the United Kingdom are also ongoing. The FTA talks are part of India's wider plan to negotiate balanced trade agreements with important economies and reform existing trade treaties in order to boost trade and investment.

BNE News Desk