logo logo

India will not rush into signing FTA deals: Piyush Goyal

Deccan Herald - 24 February 2024

India will not rush into signing FTA deals: Piyush Goyal
By Gyanendra Keshri

India will not rush to conclude and sign free trade agreements (FTAs) unless there is an equitable and fair balance in trade deals, Commerce and Industry Minister Piyush Goyal said on Friday.

Speaking at the Raisina Dialogue, the minister said that extensive stakeholder consultations, inter-ministerial meetings, are conducted during FTA negotiations to ensure that FTAs are fair, equitable and balanced.

India is engaged in free trade negotiations with several countries and blocs, including the United Kingdom, the European Union, Oman, Sri Lanka and Indo-Pacific Economic Framework for Prosperity (IPEF) partner countries.

Some of these talks have missed multiple deadlines. India and the UK launched FTA negotiations in January 2022 and had set a target to conclude the deal in the same year. The two countries are engaged in 14th round of negotiations to iron out differences.

FTA negotiation with the EU was re-launched in June 2022. The two sides are engaged in the seventh round of negotiations.

Responding to a question on the delays and complications in trade negotiations with the UK and the EU, Goyal said, “We should never rush trade negotiations, they are going to impact the country for years and years to come.”

On the EU’s Carbon Border Adjustment Mechanism (CBAM) or ‘carbon tax’, Goyal said India will take up the matter “very strongly” bilaterally with the 27-nation bloc as well at the multilateral forum World Trade Organisation (WTO).

The WTO ministerial conference, the highest decision-making body of the multilateral trading organisation, is scheduled to take place in Abu Dhabi from 26 to 29 February. Goyal will lead the Indian delegation.

“Where we have to have conversations, discussions and solve issues bilaterally, we will discuss and solve them and where we have to take it up legally, we will do that,” the minister said.

Terming the CBAM as a matter of concern for different businesses, Goyal said India may take retaliatory measures. “Where we have to retaliate, we will retaliate; where we have to take countermeasures, we will take countermeasures,” he said.

The sectors that are likely to be badly hit by the EU’s new tax regime, which is scheduled to come into effect from January 1, 2026, are: iron, steel and aluminium. More than a quarter of India’s outbound shipments of iron ore pellets, iron, steel, and aluminium products go to the EU.

CBAM is likely to result in an additional 20-35% tax burden on select imports into the EU, according to a report by think tank Global Trade Research Initiative (GTRI).

Goyal said India would try to convert the EU’s action into its own advantage. “We have plans, (but) I cannot disclose...but I can assure each and every person in India that the prime minister and his team will ensure that Indian business does not suffer and we are right on top of the issues such as this,” he added.

 source: Deccan Herald