India on verge of inking FTA with EU as 7th round of talks underway
Firstpost | 19 February 2024
India on verge of inking FTA with EU as 7th round of talks underway
India is on the verge of finalising the free trade agreement (FTA) with the European Union (EU) which is currently the world’s third-largest economy by gross domestic product (GDP), standing at $16.6 trillion, after only the US and China.
India-EU 7th round of negotiations on FTA is underway in New Delhi. A 15-member team from the EU is in the national capital till Feb. 23 for deliberations.
Along with FTA talks, India-EU will also discuss an investment protection agreement (IPA) and a pact on geographical indications (GIs).
India-EU FTA: 7th round of talks underway
The seventh round of talks between India and the European Union is expected to focus on services and investments, building on earlier talks that covered goods and public procurement.
Some of the key issues include India’s trade disputes with the World Trade Organization (WTO) regarding products like mobile phones and components, as well as integrated circuits and optical instruments.
During the previous round, policy areas related to goods and government procurement offers were covered.
In the sixth round, the focus was on accelerating work on the text presented by the two sides and some progress was made on technical matters.
India-EU FTA: So far
India and the European Union started negotiations for the trade pact in 2007, but the talks were stalled in 2013 due to differences in issues such as customs duties on automobiles and spirits, and the movement of professionals.
After a lull of nine years, both relaunched the bilateral trade and investment negotiations on 17 June 2022. along with separate talks for the IPA and the agreement on GIs.
This happened after the EU and Indian leaders, on 8 May 2021, agreed to resume negotiations for a “balanced, ambitious, comprehensive and mutually beneficial” trade agreement, and to launch separate negotiations on an investment protection agreement and an agreement on geographical indications (GIs).
Leaders also agreed to link trade negotiations to finding “solutions to long-standing market access issues”.
As per the EU’s official website, it is India’s third largest trading partner, while India is the EU’s 10th largest trading partner.
Question of hundreds of billions
A report by Bloomberg, earlier this month, quoted people aware of the matter as saying the European Free Trade Association (EFTA) has committed to invest in India as part of a trade pact that is said to be in the final stages of negotiations.
The EFTA comprises Switzerland, Norway, Iceland and Liechtenstein.
The contours of the deal have been agreed and the talks which are currently underway are centered on the final investment amount, which could be as much as $100 billion over 15 years, the report quoted some of the people as saying.
A European official said while India wants the commitment to be legally binding, the amount will likely be framed as a goal, with no legal means to claim it included in the language of the agreement.
If this gets finalised, it would mark the first time an investment commitment of this nature is secured by India as part of an FTA.
With inputs from agencies
