Brussels – India and the EU are launching a new series of commercial negotiations today, in order to finalize what could be the largest trade agreement in Europe by the end of the year. But convincing New Delhi to open its agricultural markets will not be easy.
Talks taken up in 2022 After a nine -year interruption and is now in their 10th round. While the European Commission accelerates commercial transactions in the midst of increasing geopolitical uncertainty, concluding an agreement with India – which houses 18% of the world’s population – has become an absolute priority for the president of the Ursula von der Leyen commission.
A senior EU recently confirmed that agriculture remains A “difficult problem” When they discuss a free trade agreement with India, New Delhi distrust of the impact of liberalization on its vulnerable rural population. Last October, German Minister of Economy Robert Habeck suggested This agriculture should be excluded from the agreement to accelerate negotiations.
India and the EU have very different agricultural systems, in particular in terms of their importance for jobs and the economy.
In 2023, the agricultural sector of India represented almost 16% of the country’s GDP And employee 44% of the country’s workforce. For the EU, agriculture represented 1.3% of the block of the block and 5% of jobs.
But despite being a large producer of staples such as rice and cereals, India is still struggling to feed its 1.4 billion people. THE 2024 Global hunger The index class ranks the country’s hunger as “serious”.
Prices, cheese and whiskey
The prices are another battlefield. The EU average price on agricultural goods is 11.7%, while India is 39.2%, which means that New Delhi will have to accept higher cuts.
India has long maintained a protectionist policy, imposing some of the highest rates in the world to protect its development economy. Import prices are “the main tool of India” to support millions of small farmers, the main researcher of the Heinrich Böll Ranja Sengputa Foundation wrote in a article.
“In particular, small farmers, including millions of farmers, are likely to be surpassed by subsidized EU agricultural products,” wrote Sengpta.
EU’s demand for market access for traditional foods – including various types of cheese – could create important challenges for India’s emerging dairy industry, she added.
But high prices also protect giants from drinks from India and discourage the consumption of foreign products, especially spirits and whiskey.
While India is a “very promising market”, the most important in the world after China, it remains largely inaccessible due to 150% import rates, said Ulrich Adam, director general of Spiriturope, in Euractiv.
While EU negotiators continue to put pressure for prices reductions, representatives of the sector have expressed certain optimism after India Reduced prices On US Bourbon by 50% in February to alleviate tensions with Washington.
“We need an agreement with an ambitious schedule to remove prices for the main European sectors, including spirits,” said Adam, while recognizing that negotiations will be difficult.
Concern of the sugar sector
European farmers are also concerned – in particular imports of Indian sugar, because the country is one of the largest producers in the world.
When trade negotiations resumed in 2022, the European Parliament insisted That India eliminates its “enormous” sugar subsidies, following a decision by the WTO that they violate the rules of international trade.
In a press release published last week, the European Association of CEFS Sugar Manufacturers and the CIBE of the Association of Sugar-Sucre producers declared that they “opposed” to any other EU market opening to Indian imports.
Marie Christine Ribera, Director General of CEFS, warned that the prices of EU white sugar had already dropped by 35% in one year. With a continuous uncertainty of the Mercosur agreement and trade changes with Ukraine – which both imply EU concessions on sugar – it argued that new concessions to India “would pay oil on fire” and put additional pressure on an industry that has lost an average of two factories per year since 2017.
(ADM)
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