India-EU FTA Nears Finalization, Focus on Non-Tariff Barriers: Piyush Goyal
Commerce Minister Piyush Goyal stated India and the EU are close to finalizing a free trade agreement (FTA), with over half the chapters ready and market access discussions 90% complete. Addressing non-tariff barriers (NTBs) is crucial for smoother trade. Goyal, in Stockholm, emphasized resolving NTBs and expressed hope for robust solutions. He also commented on the EU's Carbon Border Adjustment Mechanism (CBAM), terming it a potential NTB requiring a response if implemented.
Unpacked:
The main unresolved issues include finalizing market access details and addressing non-tariff barriers (NTBs). Both sides are working to respect each other's sensitivities and avoid past irritants that stalled previous agreements. Only a few key areas remain to be sorted out before a final agreement can be reached.
India views the EU’s Carbon Border Adjustment Mechanism (CBAM) as a potential non-tariff barrier because it could impose additional costs or restrictions on Indian exports based on their carbon footprint, potentially limiting market access and undermining the benefits of tariff reductions.
The FTA is expected to reduce tariffs, ease compliance burdens, and unlock significant economic gains for both regions. Enhanced trade and investment flows, along with cooperation in digital and sustainability sectors, could boost growth and create new business opportunities.
India and the EU relaunched FTA negotiations in 2022 after a nine-year pause. Talks have since broadened to include trade, investment, digital cooperation, and sustainability. Both sides now aim to conclude the agreement by the end of 2025, having made substantial progress recently.