India should conclude pact with the EU, look for greater integration into global supply chains

India-US trade relations continue to be mired in uncertainty. A 50% price on exports to America remains in place and there seems to be little clarity on the wider trade agreement. However, Delhi goes ahead with his commercial talks with the EU. On September 4, Prime Minister Narendra Modi and the leaders of the European Union spoke of an “early conclusion” of the Indian-EU free trade agreement. According to a report from this document, the best EU negotiators, in charge of trade and agriculture, should visit India this week as they try to resolve some of the most controversial questions in the trade agreement. Considered in the context of the uncertainty of global trade, these talks underline the will of India to deepen its commercial relationship with the world. These are signs welcome in uncertain times.

The EU is a large market. In 2023-24, the bilateral trade in goods between India and the EU amounted to 137.41 billion dollars. In the services, it was $ 51.45 billion in 2023. And then there are investments – EU IED flows were evaluated at $ 107.27 billion between April 2000 and December 2023. A trade agreement would deepen the relationship. Several series of negotiations on the agreement have already taken place. Of the 27 chapters of the trade agreement, the negotiations would have been concluded in 11 chapters. However, there are several controversial areas, agriculture and dairy products in particular. Another area of ​​concern is the mechanism of adjusting the EU carbon border, which is entering its final diet from January 1, 2026. This would have an impact on a range of sectors such as steel, cement and cars. According to a report from this document, Delhi is looking for concessions similar to those received by the United States. The two parties seek to conclude negotiations by the end of this year. Delhi must however be aware of his red lines. The recently concluded India-UK trade agreement could offer a framework for a pact with the EU. But the relationship between India and the EU deepens beyond simple trade. According to a report from this document, on September 17, the EU Commission will unveil a strategic roadmap document, which should present an ambitious program, reducing the security, defense, trade and technology sectors. An India-EU Leaders summit is also planned for the start of next year.

Even if India is continuing these trade agreements which will increase its access to the market in high income economies of the West – in a recent past, it has also signed agreements with Australia and the United Arab Emirates – Delhi must seek greater integration with supply chains that cross East and South -East Asia. He must also assess the advantages of joining trade agreements such as the complete and progressive agreement for the transpacific partnership.