India and the EU are set to soon expedite formal negotiations for a free trade agreement (FTA), with commerce secretary BVR Subrahmanyam visiting Brussels this week to set the stage for the talks, a senior government official told FE.
The secretary’s visit follows India’s surge in interest in “balanced” trade pacts. It signed an FTA with the UAE in February, New Delhi’s first such deal with any economy in a decade, and another “substantial trade deal” with Australia last week. India is also negotiating with the UK for an FTA.
It has also lined up talks for a flurry of such agreements with Canada, Israel and GCC members.
After 16 rounds of talks between 2007 and 2013, formal negotiations with the EU for the FTA were stuck over stark differences, as Brussels insisted that India scrap or slash hefty import duties on sensitive products such as automobiles, alcoholic beverages and cheese, among others. New Delhi’s demand included greater access to the EU market for its skilled professionals, which the bloc was reluctant to accede to. Last year, both the sides announced the resumption of formal negotiations after eight years.
As both the sides prepare to resume negotiations, they could focus on “low-hanging fruit” first, before switching to contentious matters that had hampered talks earlier, according to sources.
Government officials have also been studying the EU’s recent investment agreement with China and its FTA with Vietnam for meaningful negotiations.
Preparatory work for the next round of negotiations is in full swing.
The EU, including the UK, was India’s largest destination (as a bloc) in the pre-pandemic year of FY20, with a 17% share in the country’s overall exports.
Importantly, the UK accounted for 16% of India’s $53.7-billion exports to the EU in FY20.