The European Union (EU) and India have been negotiating a Free Trade Agreement (FTA) since 2007. The aim of this agreement is to increase trade and investment between the two regions by removing trade barriers and creating a favorable environment for trade. The negotiations have been on and off since then, with many hurdles to overcome on both sides.
The EU is India`s largest trading partner, accounting for around 13% of India`s total trade. The two regions have great potential for increased trade as they share common interests in areas such as renewable energy, digital technologies, and sustainable development. An FTA between the EU and India could boost bilateral trade by over 30%, according to a study conducted by the European Commission.
However, negotiations have stalled due to disagreements on various issues. India has been seeking greater access for its professionals to the EU’s labor market, as well as the removal of tariff barriers on its products. The EU, on the other hand, has been pushing for greater access to India`s agricultural and service sectors.
Another area of disagreement has been India`s high tariffs on European cars, which has been a major point of contention for the EU. The EU has been seeking a reduction in these tariffs, which could lead to an increase in European car exports to India.
The FTA negotiations have also been impacted by India`s concerns about the impact on its domestic industries. India has expressed concern over the EU`s use of non-tariff barriers and subsidies, which it feels disadvantage Indian products in the European market.
Despite these challenges, the EU and India remain committed to negotiating the FTA. The two regions have been engaging in talks on various aspects of the agreement, including trade in goods, services, and investment. They have also been discussing issues related to intellectual property rights, sustainable development, and regulatory cooperation.
The FTA negotiations have been closely watched by other countries that have been seeking closer trade ties with India. The US, for instance, has been pushing for a trade deal with India, but negotiations have been stalled due to disagreements on issues such as intellectual property rights and agriculture.
In conclusion, an FTA between the EU and India has the potential to boost bilateral trade and investment, benefiting both regions. However, negotiations have been challenging and have been impacted by various issues. The two regions remain committed to reaching an agreement, and talks are ongoing. A successful FTA could set an example for other countries seeking closer trade ties with India.