India and the European Union (EU) will begin the 10th cycle of negotiations for a bilateral free trade agreement (ALE) on Monday, with a clear deadline for its first leadership to finalize the Pact by the end of the year.
While the problems that maintained progress remains, the The war of the world tariffs triggered by the United StatesThe change of approach from India to reinforced import rights in the last budget and flexibility shown by the EU on carbon tax issues and related issues could push negotiations much further in this round, according to experts.
The 10th round of talks in Brussels from March 10 to 14 is immediately in terms of high -level engagement between the two parties with the president of the European Commission Ursula von der Leyen and a complete college of commissioners Visit India at the end of last month For detailed discussions on the entire spectrum of the relationship.
For India, the EU is a market as important as the United States with a trade in bilateral products of $ 190 billion. Although there is a lot of uncertainty about what a bilateral trade agreement (BTA) with the United States would imply, the talks with the EU have been taking place since 2022 in the current phase.
On the Indian side, concerns are focused on agriculture, wines and cars and flexibility on the movement of professionals for the provision of services.
“While the two parties seek to extend trade, the differences persist in the scope of prices, regulatory obstacles and market access through agriculture, products with high intensity of labor and wines and the automotive sector. While the EU seeks to eliminate prices on more than 95% of its exports, India can be willing to open to more than 90% of its market, “said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI).
In agriculture, the EU puts pressure for India to cut prices on cheese and skimmed milk powder while it imposes high tasks and very difficult standards. Even if the prices are reduced, the EU regulatory framework will remain a major obstacle for Indian farmers and food producers.
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The EU wants India to reduce wines to 30 to 40% by 150%. India has offered 50% of tasks in its commercial agreement with Australia and this could be repeated for the EU.
Reductions of rights in the highly intensity sectors can arrive very early in the agreement. Currently, India’s textile exports to EU prices face 12 to 16%, which makes Indian products less competitive compared to country exports such as Bangladesh and Vietnam, which benefit from preferential access to the market under the EU trade agreements.
At the car, EU manufacturers want India to reduce import duties to fully accumulated vehicles (CBU) to 10 to 20%, down compared to the 100 to 125% current. The EU already exports more than $ 2 billion in automobiles and automotive parts to India each year, most of them arriving in a completely abduction (CKD), which faces a price of 15% when assembled locally. India previously refused to reduce car rates for Japan and South Korea as part of its existing FTAs. “A potential common ground can involve a limited number of European cars to enter India at lower prices,” said Srivastava.
The EU imposes restrictions on the provision of online services remotely and does not recognize India as a secure data country, thus restoring data flows. In services, European companies are looking for better access to the banking, legal, accounting, audit and financial services of India.
To these old problems, new ones have been added by the carbon border adjustment mechanism (CBAM) or carbon tax. India has requested an exemption for small and medium -sized enterprises from CBAM bonds. During the 2nd meeting of the Commerce and Technology Council (TTC), the two parties agreed to meet the challenges that small and medium -sized enterprises will face CBAM.
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