The Indian Union-European Union-Union negotiations have gathered a pace with the two partners who started the specific sectoral negotiations for the first time after having narrowed the differences in chapter, but their key disagreement on the “sustainability” problems persists, which they hope to approach in the next 11th series of talks starting next week in New Delhi, according to people on the current.
Significant achievements have been made on basic chapters linked to market access, therefore, sectoral discussions have been launched, starting with the industries of automotive and medical devices, they declared by requesting anonymity. Access to the market is at the heart of everything ALE and the free free free trade negotiations have built a “considerable” consensus on several chapters such as trade in goods, health and phytosanitary questions, technical obstacles to trade, commercial appeals, rules of origin, government purchases, services and investments, they added.
The two partners aim to conclude the agreement by the end of 2025.
After the meeting between the leaders of the two parties in New Delhi on February 28, commercial issues have now acquired a priority in negotiations on vexed non-traditional issues such as sustainability, carbon tax and deforestation regulations, they said. They referred to the president of the president of the European Union Ursula von der Leyen and to the meeting of Prime Minister Narendra Modi during the visit of the college of commissioners in India in February of this year.
Although the EU’s insistence to make sustainability a “restrictive” part of the proposed free trade agreement (ALE) is always a controversial question, the two parties agreed to discuss the issue at their next meeting scheduled for May 5 in the Indian capital, they said. India is everything for environmental protection, but it does not want to be part of an ALE that could be used against India by one of the 27 members of the EU as a non-tariff barrier, they added.
“Although the EU has softened its rigid position and progress on basic commercial subjects have been accelerated. We have already started sectoral negotiations covering industries such as cars and medical devices during our last series of meetings in March,” said one of them.
According to the people mentioned above, chief negotiators were able to progress quickly with the support of senior officials on both sides. The Minister of Trade and Union industry, Piyush Goyal, is expected to visit Europe next week, which could see tangible results in the 11th round of talks offered from May 5 to New Delhi, they said. Goyal should visit London, Oslo and Brussels, the headquarters of the European Commission.
A second person said Goyal was not favorable to the inclusion of sustainability problems in the ALE. “In principle, India can agree on a chapter on the TSD (trade and sustainable development), but with provisions for settlement of fair disputes and without any binding commitment in order to ensure that the clause would not be bad by any part as a non-tariff barrier to trade,” he said, adding that the deliberations are underway to reduce differences.
During the 9th summit of world technology co-organized by Carnegie India and the Ministry of External Affairs (MEA) on April 11, Goyal was frank about the position of India on this subject. He said that no autonomous nation could have a free trade agreement with the EU unless the latter stops superimposing its non-traditional bilateral trade negotiations. However, he suggested that a certain solution to this controversial affair was in sight. “My feeling is that we will be able to finish most of the discussions very amicably,” he said at the top. Explaining reason, he said that the EU cannot impose commitments without exchange on India when it is not the real culprit in questions related to climate change. HT reported it on April 12.
The citer, the second official said that the EU was struggling with impractical standards which are only non -tariff barriers prohibiting a country from having a significant bilateral commercial pact. “I am in fact a man worried about the very future of the European Union and their companies, given the kind of … difficult non -tariff obstacles that they have created, both for their own businesses and for the rest of the world,” said Goyal at the summit.
India and the EU resumed the ALE negotiations in June 2022 after a difference of nine years. Since then, they have finished 10 negotiation rooms. The 10th round resumed on March 10 in Brussels after elections in Europe.
According to the persons mentioned above, the insistence of the EU on the inclusion of non-commercial issues is the reason why an agreement has not been agreed in the past 18 years. The ALE negotiations between the two partners were launched for the first time in 2007, then suspended in 2013 due to “a gap of ambition”. The talks resumed in 2022 after the meeting of leaders in India-EU in May 2021.
While many members of the European block wish to conclude the agreement with the ALE with India in the midst of trade uncertainties and the price war, the EU pushes sustainability measures such as the carbon border adjustment mechanism (CBAM) and the EU deforestation regulation (EUDR). India estimates that CBAM is a form of tax that can cause prices up to 35% on imports of high carbon products such as cement, aluminum, fertilizers, chemicals, including hydrogen, iron and India. The CBAM will be deducted from products with high carbon intensity to compensate for the “carbon leak” involved in the import of high carbon goods.
Carbon leaks occur when EU companies move a high -intensity production abroad to countries where less strict climatic policies are in place, or when EU products are replaced by more high -intensity imports. The tax is implemented in phases from October 2023 and will become fully effective from January 2026.
The EUDR or the regulations on products without deforestation covers the production of basic products such as cattle products, wood, cocoa, soy, palm oil, coffee, rubber and some of their derivative products such as leather, chocolate, tires and furniture. This requires that the certification of importers proved that their products will not come from recently deforested land or have contributed to the degradation of the forests. The EUDR will start to apply from December 30 of this year.
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