In a joint event held at the Headquarters of the European Union (EU) at Brussels, Union Minister for Commerce and Industry Piyush Goyal, and Mr. Valdis Dombrovskis, Executive Vice-President of European Commission formally re-launched the India-EU Free Trade Agreement (FTA) negotiations.
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Besides, negotiations were also launched for a stand-alone Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement.
While the proposed IPA would provide a legal framework for cross-border investments to enhance the confidence of investors, the GI pact is expected to establish a transparent and predictable regulatory environment, to facilitate trade of GI products including handicrafts and agri-commodities.
Background
Last year, in the India and EU Leaders’ Meeting held in Porto on 8th May 2021, an agreement was reached for resuming negotiations for a balanced, ambitious, comprehensive and mutually beneficial FTA and starting fresh negotiations on the IPA and a separate agreement on GIs.
Both partners are now resuming the FTA talks after a gap of about nine years since the earlier negotiations were left off in 2013 due to difference in the scope and expectations from the deal.
Significance
This would be one of the most significant FTAs for India as EU is its second largest trading partner after the US.
The India-EU merchandise trade has registered an all-time high value of USD 116.36 Billion in 2021-22 with a year-on growth of 43.5%. India’s export to the EU jumped 57% in FY 2021-22 to $65 billion. India has a surplus trade with EU.
Other FTAs
India earlier this year has concluded FTAs with Australia and the UAE in a record time.
The FTA talks with Canada and the UK are also underway.
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