After a gap of about eight years, India and the EU will resume formal negotiations for a trade and investment agreement on May 8, with each sides aiming to expedite a deal to help financial development in the post-pandemic era.
In a virtual meeting with Portugal’s foreign minister Augusto Santos Silva on Tuesday, finance minister Nirmala Sitharaman mentioned “that resumption of formal negotiations on both Trade and Investment agreements at the Leaders’ Meeting of India and EU on 8th May, 2021 in Porto, Portugal would be a notable success for the Portuguese Presidency of the Council of the European Union”, the finance ministry tweeted. Prime Minister Narendra Modi is scheduled to attend the leaders’ summit.
The EU, like the UK, was India’s biggest export location (as a bloc) in FY20, with a 17% share in the country’s general outbound shipments.
The dialogues come at a time when India’s planned cost-free trade agreement (FTA) with the EU has lost some of its sheen, thanks to Brexit. The UK accounted for 16% of India’s $53.7-billion exports to the EU in FY20. Hence, trade offers with each the EU and the UK are essential. In reality, India and the UK are also exploring the feasibility of a trade agreement.
After 16 rounds of talks among 2007 and 2013, negotiations for an India-EU FTA had been stuck due to variations, as the bloc insisted that India reduce import duties on automobiles and wine (which would advantage primarily Germany and France), amongst other folks. The UK is unlikely to be as well rigid more than these concerns, analysts have mentioned.
In February, commerce and market minister Piyush Goyal had pitched for a speedy “early-harvest deal” with the EU, in a meeting with EU trade commissioner Valdis Dombrovskis. This, he had recommended, could be followed by a time-bound and balanced FTA.
The renewed thrust on trade talks right after the Covid-19 disruptions reinforces India’s commitment towards higher integration with the worldwide worth chain, just as it maintains that its Atmanirbhar initiative is not inward-seeking. Having pulled out of the China-dominated RCEP deal, India has been in search of to expedite trade talks with big markets.
India and the EU have currently agreed to a critique of the progress of discussions on the proposed bilateral trade and investment agreement on a month-to-month basis by senior officials. It will be followed by a quarterly critique by each Goyal and Dombrovskis.