New Delhi:
India and the European Union have established an end-of-year deadline for a historic free trade agreement, which has been underway for a few years. The announcement was made in a joint declaration by Prime Minister Narendra Modi and the EU Ursula von der Leyen chief after the two leaders met in New Delhi to further strengthen the links of India-EU.
In addition to the EU, India is in talks with several other countries independently, including the United Kingdom, to establish free trade pacts, because the fastest global economy aims to give a boost to its business ties. This decision also comes as the EU and most nations in the world try to soften the impact of the prices imposed by Donald Trump.
This is not the first time that India and the EU have been aiming for a free trade agreement. An attempt was made more than a decade ago, but talks stalled in 2013. Another attempt was made in 2021 and took place since – the two parties supporting the best result for themselves.
The links of India-EU extend far beyond simple trade. Addressing the media at the joint press conference, Prime Minister Modi said: “We have prepared a plan for collaboration in the fields of trade, technology, investment, innovation, green growth, security, skills and mobility.”
Prime Minister Modi also declared that civil servants merging the conditions for links in India-EU have been invited to finalize the agreement by the end of the year. He also said that “today we have decided to create a daring and ambitious roadmap for the India-UE partnership for the period beyond 2025. It will be launched at the next India-UE summit.”
“We will work together on triangular development projects for sustainable and inclusive development in the Indo-Pacific region and Africa,” said Modi, the Prime Minister highlighting a shared vision of India-EU for a free and open Indo-Pacific region.
Calling for the complete agreement of the very “ambitious” India-EU-EU, the head of the EU Ursula von der Leyen said that negotiations include everything, from “green technology to pharmaceutical products, semiconductors with green hydrogen and defense”.
She also described the Indian Ocean as “global trade buoy” and said that her security was “vital, not only for India but for the whole world”. Stressing a global security structure, the head of the European Commission said: “We should also explore the expansion of our joint naval exercises, based on our very successful operations in the Gulf of Guinea and the Red Sea”.
The challenge
The European Union is already the largest trading partner in India with two-way trade with more than $ 137 billion in 2023-24. In the last decade only – since 2014 – Indian -EU trade has increased by 90%.
But each time an attempt was made to have a complete agreement from India-EU, he encountered obstacles. From India, New Delhi has not been favorable to the drop in prices in certain industries, while for the EU, it was not willing to facilitate visa restrictions currently in place to slow down Indian professionals to work in Europe.
While Europe wants the prices to be reduced to the importation of cars and bikes as well as whiskeys and wines, India wants Europe to give greater access to Indian pharmacy companies to provide profitable medicines and chemicals across Europe.
India also wants Europe to reduces import prices on textiles, clothing, leather products. New Delhi also rejects a carbon tax of 20 to 35% imposed on industrial goods such as cement, steel and aluminum.
The Indian-Europe corridor
In another significant update, Prime Minister Modi has confirmed that detailed discussions took place with European leaders on the East-Europe Corridor Indi-Midde strategically important as it is often called.
As its name suggests, the project, already under construction, will link India to all of Europe across the Middle East (Western Asia) via the sea, rail and road. “I am convinced that the IMEEC corridor will prove to be an engine to stimulate global trade, sustainable growth and prosperity,” said Prime Minister Modi at the joint press conference.
The two parties agreed to give a boost to the project to improve connectivity and save costs by making a priority.
(Reuters and PTI entries)
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