The EU and India are preparing for the tenth cycle of AFT negotiations in Brussels, focusing on falling prices on key products. This agreement aims to improve market access for industries with high intensity of India labor and to respond to concerns concerning the proposed carbon border adjustment mechanism (CBAM) of the EU.
New Delhi: the European Union (EU) actively seeks to reduce prices on key products such as whiskey, wine and cars as part of its current negotiations for a Free trade agreement (FTA) with India.
It will be a central discussion point for the block of 27 members, because they aim to obtain a complete and commercially significant commercial agreement. The college of EU commissioners, led by the European Commission President Ursula von der LeyenVisit India from 27 to 28 February to advance these negotiations.
After nine series of negotiations, the EU and India are preparing for the tenth round, which takes place for March 10-14 in Brussels. This FTA, if it is completed, will be the largest trade agreement for India and considerably expand market access for industries with high labor intensity, including leather, textiles and marine products. This agreement should considerably increase India exports to the EU, which is the country’s second export market after the United States.
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Carbon border adjustment mechanism (CBAM)
The proposed EU carbon adjustment mechanism (CBAM)Who seeks to impose a border tax on goods with high carbon intensity, is one of the main subjects of discussion in negotiations. India trade can be affected by this system, which should come into force next year. Small and medium -sized enterprises (SMEs) in industries such as steel and aluminum can be the most affected. Due to the emissions integrated in their products, India has expressed reservations on the CBAM, saying that it will exercise an additional burden on companies operating in developing countries.
India pleads for concessions for its SMEs and repels the CBAM. The country is also looking for better access to the EU services market and mobility opportunities for skilled workforce. The EU, on the other hand, puts pressure for stronger commitments from India on prices, non -tariff obstacles and supply rules.
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Optimism for a successful conclusion of EU-India FTA
Negotiations have continued since May 2021, when Indian and European leaders have agreed to relaunch talks for a “balanced, ambitious, complete and mutually beneficial” trade agreement.
The EU recently provided pricing concessions to the Mercosur block as part of a commercial agreement, and India is considering similar advantages. Indian textile exports are currently faced with a competitive disadvantage compared to countries such as Bangladesh and Vietnam due to an additional 10% rate in the absence of an ALE. An agreement with the EU would equalize the rules of the game for manufacturers of Indian textiles.
Beyond the trade in goods, the EU and India also negotiate an investment protection agreement and an agreement of geographic indications (GI). These discussions are intended to meet the long -standing challenges of market access and to improve economic cooperation between the two regions.
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As the tenth series of negotiations approaches, the two parties remain optimistic about the conclusion of an agreement. However, filling the gap in commercial expectations and responding to the concerns concerning the CBAM will be crucial for the successful conclusion of the Eu-Inde fta.
Discussions to come in Brussels will be essential in determining the trajectory of this long -standing commercial partnership, which has important potential for both savings.
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