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The negotiations will not be easy, but India and the EU seem determined to sign a major trade agreement by the end of the year.
ADVERTISEMENTAs Donald Trump threatens the European Union with new tariffs on goods, the EU is desperately seeking new trading partners. India might be one of them. Both blocs announced on Friday that a free trade agreement would be signed by the end of the year.“A free trade agreement between the EU and India would be the largest deal of this kind anywhere in the world,” president of the Commission Ursula von der Leyen said on Friday from New Dehli, adding: “This is why we have agreed with Prime Minister Modi to push to get it done during this year.”The trade negotiation agenda is ambitious, whereas the last two decades have produced little in the way of results. Started in 2007, the talks were frozen for a decade between 2013 and 2022.But Europeans are making it a priority in an increasingly uncertain geopolitical context, where alliances are made and broken. “I am well aware it will not be easy” von der Leyen said, “but I also know that timing and determination counts, and that this partnership comes at the right moment for both of us.”The EU hopes to get access to the India market for its cars and spirits, despite high India tariffs. It also hope to conclude soon an agreement on investment and Geographical Indications.The EU is expecting difficult negotiations on agriculture. It’s a sensitive issue for Europeans, whose farmers fear unfair competition from non-European importers, and also for India, whose agricultural system is based on small scale farms.India will certainly not be an easy negotiating partner for the Europeans, who risk being accused of protectionist environmental rules. The Carbon Border Adjustment Mechanism (CBAM), the EU green legislation that applies to imports in the EU, is notably an issue. “These are fair measures, WTO compatible” a senior EU official said, “these are illegitimate concerns that we are ready to address.”
