European delegation set to visit Delhi for talks next week

India and the European Union (EU) have reaffirmed their commitment to conclude the Free trade Agreement (FTA) by the end of 2025 with a high level EU delegation set to visit New Delhi for talks next week.

The Commerce Ministry on Wednesday said the EU technical team led by the Director General for Trade will be in India next week to achieve a constructive conclusion of the agreement based on the potential solutions identified over the past two days.

The European officials’ visit will be a follow up to Commerce Minister Piyush Goyal’s visit to Brussels to discuss the issue.

India said the minister had productive and meaningful engagements with Maros Sefcovic, European Commissioner for Trade and Economic Security, on outstanding issues.

“Both sides reaffirmed their shared commitment to conclude the India-EU FTA by the end of 2025. The engagement focused on achieving a mutually beneficial, balanced and equitable trade agreement, reflecting the depth of political trust and the strategic ties between India and the European Union, and at the same time respecting each other’s sensitivities and priorities,” the ministry statement read.

The Commerce Ministry said India recognised the importance of ensuring that the FTA remained balanced in addressing tariff and non-tariff barriers and creating transparent and predictable regulatory frameworks that accelerate trade for both partners in the coming years.

“There was intensive engagement to explore possible landing zones on the outstanding issues. There was also a good discussion on India’s concerns on non- tariff measures and the new EU regulations. During the negotiations, the Commerce Minister emphasised the need for preferential treatment for India’s key asks, particularly those with respect to labour-intensive sectors. Both sides agreed to work closely to finalise the non-sensitive industrial tariff lines. They also agreed that issues related to steel, auto, carbon border adjustment mechanism (CBAM) and other EU regulations still require further discussion, as these issues have higher sensitivities,” the ministry said.

India has specific objections to the CBAM and EUDR (Deforestation regulation). Under the CBAM, Indian exports of steel, aluminium and cement to the EU could face tariffs of 20-35 per cent.

Deforestation regulation could adversely affect India’s exports of coffee, leather hides and paperboard worth USD 1.3 billion annually to the EU.

The EU Deforestation Regulation (EUDR) requires companies to prove that certain products placed on the EU market are not produced from deforested or degraded land. It applies to cocoa, coffee, palm oil, rubber, soy and wood, along with derived products.

During his Brussels visit, Goyal is learnt to have flagged multiple EU regulations that are making it difficult to reach a deal. Speaking at the Berlin Global Dialogue on October 24, ahead of Brussels visit, Goyal had openly said, “Because of regulations, Europe is going to have existential crises for their business. Their infrastructure will get costlier, so also planes and automobiles. They will be living in a cocoon. While other partners will be trading with each other, Europe will be left holding the can that it has 73 regulations between the EU and other states.”

He said it was nearly impossible to fulfil all paperwork, additional tax burden and the EU was seeking to hyphenate too many issues.

Can make big difference

Discussed how India and the EU can maximise convergences and deepen cooperation. This can stabilise the global economy and strengthen democratic forces. The early conclusion of the India-EU FTA can make a big difference to these objectives. — S Jaishankar, External Affairs Minister