• India
  • Jun 20

India, European Union resume free trade talks after 9 years

• India and the European Union (EU) have restarted the negotiations for the long-pending trade and investment agreement after a gap of nine years.

• The negotiations took place in Brussels, over a year after India and the EU announced to resume the talks for a balanced and comprehensive trade pact. 

• EU trade commissioner Valdis Dombrovskis said the next round of negotiations on the FTA will take place from June 27 to July 1 in New Delhi.

• This would be one of the most significant FTAs for India as the EU is its second largest trading partner after the US. 

India-EU trade relations

• India-EU relations date back to the early 1960s with India being amongst the first countries to establish diplomatic relations with the European Economic Community in 1962. 

• India is the EU’s 10th most important trading partner, accounting for over 2 per cent of EU trade in 2021.

• The India-EU merchandise trade has registered an all-time high value of $116.36 billion in 2021-22 with a year-on growth of 43.5 per cent. India’s exports to the EU jumped 57 per cent in FY 2021-22 to $65 billion. India has a surplus trade with the EU.

India-EU FTA talks

• Launched in June 2007, the negotiations for the proposed agreement have witnessed many hurdles as both sides had major differences on crucial issues.

• The negotiations for the free-trade agreement were suspended in 2013 after several rounds of talks spanning six years.

• The talks were stalled after the two sides failed to iron out the differences related to tariffs on certain goods and the movement of professionals.

• In the India and EU Leaders’ Meeting held in Porto in May 2021, an agreement was reached for resuming negotiations for a balanced, ambitious, comprehensive and mutually beneficial FTA and starting fresh negotiations on the Investment Protection Agreement (IPA) and a separate Geographical Indicators (GIs) Agreement.

• Earlier this year, India concluded FTAs with Australia and the UAE. The FTA talks with Canada and the UK are also underway. The FTA negotiations are part of India’s broader strategy to forge balanced trade agreements with key economies and revamp existing trade pacts to improve trade and investment.

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