India and the European Union are pushing forward with their ambitious trade negotiations, having successfully closed seven of the 23 chapters as they eye a major agreement by year-end.
India and EU Inches Closer to Landmark Trade Deal
Trade discussions between India and the European Union are gaining significant momentum. In their latest round of talks, held in Brussels last week, the two sides managed to finalize two more chapters, bringing the total to seven out of 23. This potential Free Trade Agreement (FTA) could mark India’s largest trade pact to date.
Officials confirm that the 12th round saw comprehensive discussions. Both parties exchanged offers on services and non-services, alongside crucial talks on market access for goods. The next decisive round of negotiations is set to take place in the first week of September.
Clarifying the Carbon Border Adjustment Mechanism (CBAM)
Amid the ongoing trade talks, a notable clarification has emerged regarding the European Union’s Carbon Border Adjustment Mechanism (CBAM). Hervé Delphin, the EU Ambassador to India, recently emphasized that CBAM is not a trade measure and is not part of the FTA negotiations.
Instead, CBAM is an integral part of the EU’s climate agenda, designed to accelerate decarbonization efforts. This distinction is crucial for understanding the scope of the current trade agreement discussions.
High-Level Commitment Fuels Progress
The urgency and commitment to these negotiations come from the highest levels. Back in February, Prime Minister Narendra Modi and the European Commission President jointly agreed to work towards finalizing the FTA by the end of 2024. This shared objective is clearly driving the accelerated pace of the talks.
Parallel Progress: Reviewing the ASEAN Deal
While focused on the EU, India is also actively engaged in reviewing its trade agreement with the Association of Southeast Asian Nations (ASEAN). The 10th and 11th rounds of these talks are scheduled for August in India and October in Malaysia, respectively.
According to Rajesh Agrawal, Special Secretary in the Department of Commerce, progress on the ASEAN deal has been “chequered” but is advancing in key areas. Significant strides are being made, particularly in customs and trade facilitation, as well as technical cooperation, sanitary and phytosanitary (SPS) measures, and technical barriers to trade (TBT).
India aims to conclude significant aspects of this upgraded pact by the ASEAN-India Summit later in October. The goal is to address existing asymmetries and ensure a more balanced and sustainable trade relationship for the future.
- India and the EU have closed 7 of 23 chapters in their ongoing trade negotiations.
- The next crucial round of India-EU talks is slated for early September.
- The EU’s CBAM is a climate initiative, not part of the trade deal.
- India is also progressing in parallel talks to upgrade its trade pact with ASEAN.
With high-level commitment and dedicated rounds of talks, both the India-EU and India-ASEAN trade agreements are moving steadily towards significant conclusions, promising a boost to India’s global trade relations.
