 "FTA, Free Trade Agreement, Trade Ties, Deals, Partnership")
Illustration: Ajay Mohanty
Top government officials from India and the European Union (EU) on Friday acknowledged slower-than-expected progress in the proposed trade agreement and called for mutual cooperation and understanding to advance the negotiations.
Commerce and Industry Minister Piyush Goyal said that ‘extraneous elements’, having no relevance to trade or business, are hurting the interests of both sides, thereby slowing down the progress on India-EU Free Trade Agreement (FTA) negotiations.
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“The European Union will have to decide whether they are looking at expanding trade, expanding business between the two sides, or whether they are looking at issues which are dealt with by other international organisations… we should be focusing more on our mutual engagements through our FTA on trade and business-related issues,” the minister said at the launch of the Federation of European Business in India (FEBI).
EU Ambassador to India Hervé Delphin, who was also present at the launch, pointed out that progress in the FTA has been ‘marginal’ as both sides are yet to overcome ‘fundamental differences’. According to Delphin, to finalise the trade agreement, both sides need to recalibrate, but also ensure that the trade deal is meaningful.
“Both sides must reflect on potential packages of mutual concessions, which would see both parties move into trade policy territory where they have never ventured so far. The EU will be ready to do its share, but this will also require India to cover a large part of the distance that still separates us for the time being. The time has come for such a political call,” he said at the official launch of the Federation of European Business in India (FEBI).
In June 2022, India and the EU kick-started formal negotiations towards an FTA that has been stalled for close to nine years. Nine rounds of negotiations have taken place so far, and the next round is expected early next year.
Delphin and Goyal also highlighted the need to resolve constraints and regulatory hurdles faced by companies while doing business in India and the EU, respectively.
While Delphin pointed out issues such as quality control orders, stringent import licences, and legal uncertainties regarding investment protection and taxation that European businesses face in India, Goyal mentioned ‘unfair’ trade practices, in the form of ‘irrational’ duties such as the Carbon Border Adjustment Mechanism (CBAM) and deforestation-related duties.
Goyal also said that for over half a decade, India has been negotiating on such duties, which he argued are against the Most Favoured Nation (MFN) clause of the World Trade Organization (WTO), as the EU has been introducing newer elements into the Indo-EU trade relationship.
“We have the same problem on standards, with irrational standards set by the EU that act as a trade barrier to expanding trade between India and the EU. We have people telling us about significant unfair trade practices on the European side… I have been requesting that India doesn’t have any unfair trade practices, so why should we be subject to additional duties? After six years, we may have to consider other measures,” he said.
“The world today can’t work on the principle of retaliation. It has to work on the principle of mutual cooperation and finding solutions,” Goyal added.
First Published: Oct 11 2024 | 8:43 PM IST
