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European Union India FTA: The discussions on the Free Trade Agreement between India and the European Union have been ongoing for a considerable amount of time. Recently, when these discussions appeared to reach their conclusion, a request for the reduction of tariffs on cars, as well as whiskey and wine, increased dramatically.

The European Union consists of a group of 27 nations from Europe whose main purpose is to improve mutual economic, trade, security, and diplomatic activities. Therefore, European Union President Ursula von der Leyen shall be in India on the 27th of February and 28th of February, 2023, along with a large delegation from the EU. She will lead the delegation to India to engage in more detailed discussions about trade along with technology issues during the visit.

What are the key concerns of the European Union

As an EU official stated to the Indian Express, the Indian market is still quite ‘niche’ in comparison to other markets with regards to many commercial items, especially the automotive, wine, and spirits industries. A reduction in the import duties on these products is a must so that Europe has a better chance in India.

The EU believes that in order to conclude a trade agreement with India, the deal must be “commercially viable”. This is the reason why apart from the reduction of tariffs, there are also expectations towards India’s clear position on the non-tariff barriers and on the government procurement commitments.

There have been 9 rounds of discussions so far.

Up until now, there have been 9 rounds of talks and the 10th round will be in Brussels in March. If this agreement turns out to be successful, it will mark the largest free trade agreement (FTA) that India has entered into. India has sought to safeguard its Micro, Small and Medium Enterprises (MSME) under this agreement. In addition to this, India is also worried about the possible negative impacts on steel and aluminum products of the European Union’s Carbon Border Adjustment Mechanism (CBAM).

Professors state that this agreement will enable India to enhance its exports with particular focus on textiles, leather, and seafood.” Presently, Indian exporters of textiles have to face an additional 10 percent duty in Europe which is not the case with Bhutan and Vietnam. This is because FTA India does not have with the EU. If the FTA is successful, Indian nubian products will stand in competition with Indian FTA countries Vietnam and China.

India has a focus in participating in EU services under this agreement. At the same time, more skilled professionals from India are welcome to Europe. The EU is not only India's second largest market but also a huge market for services. Thus, India seeks to include more sectors like IT and health in this agreement.

EUC where issues of India’s relationship with Russia China will also feature prominently.

In addition to this trade conversation, EU officials may also address the sanctions on Russia alongside India’s stance on it. The EU expects India to assist in the sanctions to make them effective on Russia.

Additionally, Europe wants to collaborate with India on the process of reducing risks associated with China. The European Union expects that India can play an important role in mitigating the trade overdependence with China.

In the world, the European Union holds the record for the biggest number of trading agreements. It has trade contracts with 76 nations, whereas India does not have a large pool of FTAs to boast of. India is actively pursuing FTA agreements with both the European Union and the United Kingdom.

What are the member countries of the European Union?

The European Union is one of the most powerful entities in the world, both in terms of economy and trade. The member countries of the EU include Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

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