India-Ue Trade Deals Talks should start on Monday in the midst of major unresolved problems

New Delhi: India and the European Union (EU) are all intended to engage in the 10th round of negotiations for the trade and investment agreement (BTIA) with wide Brysels based from March 10 to 14, because the two parties aim to resolve key issues and finalize the long -standing trade agreement by the end of the year.

Negotiations, which started in 2007, have evolved slowly due to disagreements on market access, prices, regulatory standards and sustainability commitments. However, recent high -level commitments, including the visit to the European Commission Ursula von der Leyen in Delhi in February, added to the process.

According to a report by the Global Trade Research Initiative (GTRI), critical snack points remain in agriculture, dairy products, cars, wine, textiles, services and investment protection. The EU put pressure for the elimination of prices on more than 95% of its exports to India, while India plans to open up to 90% of its market, in accordance with the GTRI ratio.

Agriculture remains a controversial area, the EU looking for lower tasks on cheese and skimmed milk powder, which India protects to support its dairy producers. GTRI noted: “The dairy sector of India is very sensitive, with millions of small farmers dependent. Reduction of prices on EU dairy products could affect domestic production. »»

In the automotive sector, European manufacturers want India to reduce import duties to fully built cars from 100 to 125% existing at around 10-20%. However, India remains cautious.

“The automotive sector is a major contributor to GDP and the use of manufacturing India. Any drastic price reduction in European luxury cars may have an impact on national manufacturers, “said Ajay Srivastava, founder of GTRI.

A compromise may involve authorizing a limited number of European cars at lower prices, as shown in the agreement of India with Japan.

For better access for textile exports

India is also looking for better access for its textile exports, which are currently faced at EU prices from 12 to 16%. The report indicates that “the suppression of tariffs on Indian textiles from the first day of the agreement could considerably increase the exports of India, helping its industry with a high intensity of labor with Bangladesh and Vietnam”.

The service sector presents another challenge. India wants recognition as a secure data country under the general data protection regulation (GDPR) of the EU to facilitate digital trade, as well as short -term commercial visas easier for its professionals.

The EU, in turn, requires better access to the banking, financial services and legal services in India. The GTRI report notes that “India is facing obstacles such as high salary thresholds and local hiring requirements in the EU, which limits the movement of its IT professionals.”

The protection of investments remains unresolved, the EU seeking stronger guarantees for its investors. India, however, is firm on its model of bilateral investment treaty, which prioritizes regulatory autonomy, according to the report.

“India had dismissed 22 investment treaties with EU nations earlier, citing concerns about the excessive investor rights. All new investment rules will have to find a balance between India’s protection and political space, ”says the report.

Another area of ​​divergence are problems with sustainability and work. The EU puts pressure for binding commitments on labor rights and environmental standards, while India prefers a flexible approach. In addition, the EU carbon border adjustment mechanism (CBAM), which imposes additional prices for high carbon imports such as steel and aluminum, is a major concern for India.

“Even if a trade agreement is signed, CBAM could cancel the advantages for Indian exports. India must negotiate compensatory exemptions or measures ”, in accordance with the GTRI report.

The ninth round of negotiations between India and the European Union (EU) for the ALE took place in New Delhi from September 23 to 27, 2024. The talks focused on basic trade issues, including goods, services, investment and government purchases.

Mutual benefits included

Despite these obstacles, the two parties recognize the advantages of a commercial agreement. The bilateral trade between India and the EU reached $ 190 billion during the 201024 financial year, which makes the second EU export market in India after the GTRI report notes that “India is significantly due to textiles, pharmaceuticals and financial services.”

The talks resumed in 2021 after years of blocking, and the negotiations were relaunched in 2022 with a larger range covering trade, investment protection and geographic indications. “The two parties pushing to conclude the agreement in 2025, the coming months will be crucial to determine if a breakthrough can be made after almost two decades of discussions,” said Srivastava.

The trade in alcoholic beverages of India with the EU shows a significant gap, especially in wines. In 2024, India exported only $ 1.5 million in EU wines, while its imports amounted to $ 412.4 million. In Spirits, India has exported whiskeys, vodka, brandy and liquors of $ 64.9 million, against $ 22.3 million, mainly composed of Brandy, Gin, Tequila, Vodka and Liqueurs.

During the 2024 fiscal year, the main imports of European Union India included machines and computers worth $ 12.9 billion, turbojets representing $ 1.6 billion. Electronic imports amounted to $ 10.2 billion, pulled by mobile phone parts worth $ 2.8 billion and integrated circuits (ICS) worth $ 1.8 billion. Aircraft imports amounted to $ 5.4 billion, while medical devices and scientific instruments were estimated at $ 3.6 billion.

During the year 2024, exports of key products from India to the European Union were directed by petroleum products, totaling $ 19.9 billion, diesel exports representing $ 12 billion and aeronautical turbine fuel (ATF) contributing to $ 6.8 billion. Electronic exports amounted to $ 8 billion, driven by smartphones expeditions worth $ 4.3 billion.

The textile and clothing sector experienced $ 1.6 billion exports and $ 5.1 billion, respectively. The machines and computers were exported to a value of $ 5.2 billion, while organic chemicals contributed $ 5 billion. Iron and steel exports amounted to $ 4.7 billion and valuable stones and jewelry shipments were estimated at $ 3 billion. Pharmaceutical exports reached $ 2.9 billion and exports of automotive parts totaled $ 1.6 billion.