NEGOTIATIONS FOR INDIA-EU FREE TRADE AGREEMENT

About:

• 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.