India, EU Leaders Express Concern Over Slow Progress In Free Trade Agreement Negotiations

Top Government Officials from India and European Union (EU) on Friday recognised the slower-than-anticipated progress in the proposed Free Trade Agreement (FTA), urging for greater cooperation and mutual understanding to move the negotiations forward.

At the launch of the Federation of European Business in India (FEBI) on 11 October, Commerce Minister Piyush Goyal, and Herve Delphin, EU Ambassador to India, emphasised the need to address constraints and regulatory barriers faced by the companies, while operating businesses in India and EU.

Goyal stressed upon the importance of focusing more on mutual engagements through the FTA on trade and business related issues than on "extraneous elements".

"The EU will have to decide whether they are looking at expanding trade, expanding business between the two sides, or whether they are looking at issues which are dealt with by other international organizations," Goyal said.

Goyal also touched upon 'unfair' trade practices, in the form of 'irrational' duties such as Carbon Border Adjustment Mechanism (CBAM) and deforestation- related issues as hurdles faced by the Indian companies.

He said, "Both sides must reflect on potential packages of mutual concessions, which would see both parties move into trade policy territory where they have never ventured so far. The EU will be ready to do its share, but this will also require India to cover a large part of the distance that still separates us for the time being. The time has come for such a political call".

He also pointed the need to address issues such as quality control orders, stringent import licenses and legal uncertainties surrounding investment protection and taxation that European business faces in India.

In June 2022, India and the EU began formal negotiations for a Free Trade Agreement (FTA) that had been stalled for nearly nine years.

So far nine rounds of discussions have been conducted, with the next round expected early next year.

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