India and European Union hope for trade deal by July, demand exemption on tariff from US
Trade Deal: After a long gap, a preliminary trade agreement is going to be signed between India and the European Union (EU). Both sides are hopeful of reaching an agreement on this issue by July. At the same time, a trade agreement is going to be signed between India and the US, in which India is going to demand an exemption from additional tariffs. Let us know about this in detail.
India and the European Union are looking forward to finishing an initial trade pact in the month of July. The government official provided the information on Wednesday. According to the official, the agreement will cover issues related to intellectual property rights (IPR), government procurement, tariffs, and non-tariff barriers. The Commerce Ministry delegation is in Brussels for the next set of discussions on the trade pact with the European Union (EU) this week. The official said we would like to agree on the agreement at the earliest.
Both countries, in the wake of the recent worldwide uncertainty, particularly the policy of Donald Trump on tariffs, have agreed on two stages to finalize the agreement. India has pursued the policy of negotiating the trade agreement in two stages.
Apart from seeking significant duty cuts in automobiles and medical equipment, the EU wants a reduction in duties on products such as wine, spirits, meat, poultry, and a strong intellectual property regime. If this agreement is reached, Indian goods could become more competitive in the EU. This includes ready-made garments, pharmaceuticals, steel, petroleum products, and electrical machinery.
In June 2022, India and the 27-nation EU bloc will hold talks on a comprehensive free trade agreement after eight years. It stalled in 2013 due to differences over the level of opening up markets. On February 28, Prime Minister Narendra Modi and the President of the European Commission agreed on a comprehensive free trade agreement by the end of this year.
The trade deal talks between India and the EU cover 23 policy areas or chapters. These include trade in goods, trade in services, investment, sanitary and phytosanitary measures, technical barriers, trade remedies, rules of origin, customs and trade facilitation, competition, trade defense, government procurement, dispute settlement, intellectual property rights, geographical indications and sustainable development.
India's bilateral trade with the EU in 2023-24 was $137.41 billion ($75.92 billion exports and $61.48 billion imports), making it the largest trading partner for goods. The EU market accounts for about 17 per cent of India's total exports, while EU exports to India account for 9 per cent of its total overseas shipments. Apart from this, bilateral service trade between India and the EU was around $51.45 billion in 2023.
At the same time, India and the US may announce an interim trade agreement before July 8. Commerce and Industry Minister Piyush Goyal was in Washington earlier this week to speed up trade talks. An official said that in this agreement, India will demand exemption from 26% additional tariff and 10% baseline tariff imposed by the US. Also, India is demanding concessions for its labor-intensive sectors such as textiles and leather.
