The ongoing trade negotiations between India and the European Union are significant for both sides, especially in the backdrop of the dynamic global economic landscape with the discussions aiming to foster a deep and comprehensive free trade agreement, as highlighted by EU trade commissioner Valdis Dombrovskis.
Brussels and New Delhi have embarked on a renewed effort to forge a comprehensive free trade agreement (FTA) from 2022. The relaunched negotiations aim to transcend conventional tariff cuts, focusing on broader aspects like market access, investment protection, and sustainability. Dombrovskis, who is attending the G20 meeting of trade and invest ministers in India, highlighted the multifaceted significance of this collaborative endeavour.
“EU and India are developing this partnership across different areas, including in trade,” he said. The negotiations encompass FTA discussions alongside deliberations on investment protection and geographical indications.
In 2021, the EU’s trade in goods reached 88 billion euros, accounting for 10.8 percent of India’s total trade. While five negotiation rounds spanning two years have transpired, challenges persist in aligning the two sides for a mutually beneficial agreement.
“We are making progress on a number of areas, but there are also a lot of outstanding areas where further work is needed,” Dombrovskis said. He will be co-chairing the EU-India High Level Dialogue on Trade and Investment together with commerce minister Piyush Goyal during the visit.
Market access and import duties emerge as central points of deliberation. Dombrovskis emphasised on the broader aspirations of these talks, saying, “Well, I cannot discuss specific sectors or alliances; it’s still a work in progress. But I would emphasise that we’re also looking at other areas like access to public procurement and trade-related sustainability.”
The convoluted global economic landscape prompts scrutiny of China’s multifarious role. Addressing China’s position in the world order, Dombrovskis said, “We see the context of Covid-19 pandemic leading to supply chain disruptions and a more conflictual geopolitical environment, particularly due to Russia’s aggression against Ukraine.”
Amid these dynamics, the EU remains committed to maintaining the international rules-based order, emphasising discussions on WTO reforms for equitable trade relations. India’s potential as a manufacturing hub garners attention, with Dombrovskis acknowledging untapped opportunities.
He stressed on the need for a stable economic environment, including investment protection agreements and tariff reductions, to attract European investment. The Trade and Technology Council holds promise in fostering ‘green’ energy and hydrogen cooperation. Dombrovskis said: “It’s important to intensify our cooperation with tens of power stations, reach agreements, and then use this potential.”
Despite challenges, pragmatic collaboration is essential as the global economic landscape evolves. Echoing past negotiation experiences, both India and EU are proceeding with caution. Asked about a potential timeline, Dombrovskis underscored substance over deadlines, saying, “We need to make progress on substance and once we have progress in substance, we can conclude a new course.”
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