India, EU gear up for tenth spherical of FTA negotiations
Recent momentum in India-European Union (EU) free commerce negotiations has emerged towards the backdrop of world uncertainties and shifting geopolitical equations after the US presidential elections, as high negotiators from each side met in Brussels not too long ago to organize for the tenth spherical of talks.
The 27-member European bloc sees India, with its democratic values and sturdy financial system, as a pure commerce associate to make sure trusted provide chains amid turbulent world circumstances, in keeping with officers acquainted with the matter.
“India is the go-to nation for a lot of the developed world amid an anticipated change in commerce dynamics after President Trump assumes energy in January. EU wouldn’t prefer to miss the bus after investing over two years in negotiating an FTA with India since June 2022,” stated an individual near the negotiations.
Sustainability rules like labour requirements, deforestation guidelines and carbon tax have been key hindrances regardless of 9 rounds of talks, with the Europeans insisting these be seen as commerce issues. “India will not be averse to the thought of surroundings safety. Actually, it’s dedicated to fulfil the duty by 2070. However, clubbing these within the free commerce deal would quantity to placing non-tariff boundaries in a sly, which was not acceptable,” the official stated, and added that “plainly some convergence on this matter is seen not too long ago, which is certainly a optimistic signal”.
A second particular person conscious of the matter stated that “issues have modified after the result of the US presidential election in early November. The eagerness and optimistic indicators had been seen throughout commerce secretary Sunil Barthwal’s latest assembly with senior EU officers and European diplomats.”
Commerce secretary Barthwal met EU director common Sabine Weyand in Brussels on November 21, the place each side confirmed renewed eagerness. They mentioned FTA negotiations progress, cooperation below the India-EU Commerce and Expertise Council, and market entry points.
Whereas EU seeks zero-duty market entry for its items in India with reciprocal advantages, inclusion of sustainability measures like carbon tax may probably nullify commerce benefits for Indian exporters. Key issues embody the Carbon Border Adjustment Mechanism (CBAM) and EU deforestation regulation (EUDR).
The carbon tax burden for India is estimated at 0.05% of GDP, in keeping with a July report by the Centre for Science and Atmosphere. The EU is India’s second-largest export vacation spot, receiving merchandise exports price $76 billion in 2023-24, whereas India imported items valued at over $59 billion.
CBAM may result in tariffs of as much as 35% on carbon-intensive Indian exports like cement, aluminium, fertilisers, chemical compounds, iron and metal. The tax, being applied in phases from October 2023, turns into absolutely efficient January 2026.
In the meantime, EUDR’s implementation deadline for deforestation-free certification of merchandise like cattle, wooden, cocoa and derived items has been prolonged by a yr to December 30, 2025.
