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NEW DELHI: India and the European Union may announce an early harvest deal by July this year to remove tariff and non-tariff barriers and boost mutually beneficial bilateral trade in goods, government procurement and protection of intellectual property, an official with direct knowledge of the matter said on Wednesday.
The India-EU free trade talks are on a fast track with an understanding to cover “core trade matters” first and then negotiate the rest of the issues of bilateral interest such as sustainability, the official said, requesting anonymity. “India and the EU are looking for an early harvest [deal]. We are trying to do it as early as possible… by July,” the official said. The Indian negotiating team is already in Brussels to take forward the 11th round of talks, which was concluded on May 16 in New Delhi.
HT reported on May 20 that India and the EU were eyeing quick wins in their FTA push.
The EU doesn’t want to be left out after its erstwhile member, the United Kingdom, successfully concluded the India-UK free trade negotiations on May 6 and the bilateral trade talks between the United States and India are at an advanced stage, the report said.
Of the nearly two dozen chapters — such as trade in goods and services, investments, government procurement, mobility for professionals, and intellectual property — India and the EU have already finalised at least three to four chapters, said a second official, who did not wish to be named. The other proposed chapters include sanitary and phytosanitary measures, technical barriers to trade (TBT), trade remedies, rules of origin (ROO), customs and trade facilitation, competition, trade defence, dispute settlement, geographical indications, and sustainable development.
“There is a possibility to conclude the proposed FTA between India and the EU in two phases – early harvest with low-hanging fruits and a comprehensive agreement later because of two reasons. First, the nature and scope of the FTA are vast that involve building consensus among 27 EU members. And second, the rapidly evolving uncertain global trade dynamics,” he said.
Both partners (India and the EU) understand that they must first focus on core trade matters and leave negotiations involving non-core issues for later. India had a similar approach with Australia when the two countries concluded an FTA in 2022. Its negotiations for a bilateral trade agreement (BTA) with the US are also on similar lines.
HT reported on April 28 that the India-EU free trade talks gathered pace with both partners starting sector-specific negotiations for the first time after narrowing chapter-wise differences, but their disagreements on non-core issues such as sustainability persisted.
After significant achievements have been made on core chapters related to market access, the two sides initiated sector-specific discussions, starting with the automotive and medical devices industries, it reported. The talks were fast-tracked after the meeting between leaders of both sides in New Delhi on February 28. Trade matters have now gained precedence in negotiations over vexed non-trade issues such as sustainability, carbon tax and deforestation regulations, the people mentioned above said. They were referring to European Union president Ursula von der Leyen and Prime Minister Narendra Modi’s meeting during the college of commissioners’ India visit in February this year.
