While India and the EU have been engaging on resuming the dialogue and the broad contours of the proposed discussions, government sources said that commerce and industry minister Piyush Goyal will formally launch the talks in Brussels. Later this week, Goyal will reach Geneva for the WTO ministerial meeting and, on the way back, will stop in the Belgian capital, signalling a fresh move to cement trade ties with countries and trading blocs with which India has favourable terms of trade.
During 2021-22, the EU was India’s second-largest trading partner with exports and imports adding up to $116. 4 billion, marginally ahead of trade of $115. 4 with China. The US was India’s largest trading partner with the flow of goods between the two countries estimated at $119. 4 billion during the last financial year, according to official data.
Agreements with the UK, Canada and the EU are seen to be high on the priority list after New Delhi signed treaties with the UAE and Australia earlier this year. India and the EU had launched talks for a free trade agreement almost 15 years ago, but the negotiations stalled around 2013.
A key bone of contention were duties on wines and spirits, which the Indian government is not averse to reducing. It has already worked out a mechanism with Australia in the recently concluded talks and is negotiating concessions as part of the trade agreement with the UK, which exited the EU a few years ago. Similarly, India and the 27country bloc could not agree on reducing duties for European cars, something that is no longer a no-go area as the government also realises that it cannot protect the domestic industry, which has a large presence of foreign auto makers, indefinitely.
In return, India is hoping to get a bigger opening into Europe for its textiles, leather and services. Further, there are some specific areas of interest on the agriculture side, although New Delhi is not keen on opening up the farm sector to imports.
With talks with the UK pointing to the government’s willingness to engage on sustainability, labour and gender issues — which were earlier taboo areas — similar chapters or paragraphs may be built into the proposed agreement with the EU. Sustai- nability was one of the areas that was seen as a deal-breaker in the past, given the EU’s insistence. At the same time, the government is also cognisant of the fact that it cannot burden Indian companies with European standards, which are often used as barriers to trade.
The trade talks kick off a little over a year after Indian and European leaders agreed to resume negotiations.