India and the European Union have concluded the 11th cycle of negotiations on their long-awaited free trade agreement (ALE), the two parties deciding to continue the agreement in two separate phases. La Ronde, which ended on May 16, reflects an increasing recognition of the opposite winds of world trade – in particular those which arise from tariff actions under former American president Donald Trump – which continue to gray a shadow on multilateral trade progress.
According to a senior government official, the gradual approach aims to accelerate progress on priority issues while allowing additional time to resolve more complex or politically sensitive issues. India has already used a similar two-step framework in commercial negotiations with Australia and the United States.
Commerce secretary, Sunil Barthwal, recently noted that India was in favor of focusing on the “first things first” – prioritizing basic trade problems such as goods, services and investments – and explore what could be accelerated in an early harvest agreement. Such an approach, he said, allows the two parties to record tangible gains even if other problems are solved in subsequent discussions.
The EU has put a significant emphasis on the reduction of import duties in sectors such as cars, medical equipment, wines, spirits, poultry and meat products. In addition, he called for stronger commitments from India on intellectual property rights and application. Meanwhile, India wishes to obtain better access to the market for its very efficient export sectors, including pharmaceuticals, clothing, steel, petroleum products and electric machines, all of this must gain competitively if the pact passes.
The Ale talks, which resumed in June 2022 after an interruption of more than eight years, cover 23 complete chapters. These include trade in goods and services, investments, rules of origin, customs and the facilitation of trade, government purchases, competition, technical obstacles to trade, trade remedies, intellectual property, geographic indications and sustainable development, among others.
The Minister of Commerce and Industry, Piyush Goyal, went to Brussels on May 1 to assess the progress of negotiations. Earlier in February, Prime Minister Narendra Modi and the president of the European Commission Ursula von der Leyen reiterated their commitment to conclude the agreement by the end of 2025.
The bilateral trade of India with the EU reached 137.41 billion US dollars in 2023-2024, with exports of US $ 75.92 billion and imports totaling $ 61.48 billion. The EU remains the largest trading partner in India in goods, representing around 17% of the total exports. Meanwhile, EU exports to India represent 9% of its global expeditions. The trade in bilateral services was also robust, estimated at 51.45 billion US dollars in 2023.
In addition to the ALE, the two parties simultaneously negotiate an investment protection agreement and a pact on geographic indications (GIS), which should supplement the larger commercial objectives. If it is successfully concluded, the India-EU trade agreement could become one of the most complete and consecutive commercial partnerships for both savings.
Source: Commercial standard
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