India and the European Union held wide-ranging talks on its ties, including a free trade agreement
India and the European Union have set a year-end deadline for a historic free trade agreement, which has been in the works for quite a few years. The announcement was made in a joint statement by Prime Minister Narendra Modi and EU chief Ursula von der Leyen after the two leaders met in New Delhi to further strengthen India-EU ties.
Besides the EU, India is in talks with several other nations independently, including the UK, to set up free trade pacts as the world's fastest growing major economy aims to give a boost to its trade ties. The move also comes as the EU and most nations globally are trying to soften the impact of tariffs imposed by Donald Trump.
This is not the first time that India and the EU aim for a free trade agreement. An attempt was made over a decade ago, but talks stalled in 2013. Another attempt was made in 2021 and have been on since - both sides pressing hard for the best outcome for themselves.
India-EU ties however, stretch far beyond just trade. Addressing the media at the joint press conference, PM Modi said "We have prepared a blueprint for collaboration in the areas of trade, technology, investment, innovation, green growth, security, skilling and mobility."
PM Modi further stated that officials negotiating terms of the India-EU ties, have been asked to finalise the deal by the end of the year. He also said that "Today, we have decided to create a bold and ambitious roadmap for the India-EU partnership for the period beyond 2025. It will be launched during the next India-EU summit."
"We will work together on triangular development projects for sustainable and inclusive development in the Indo-Pacific region and Africa," PM Modi said highlighting a shared India-EU vision for a free and open Indo-Pacific region.
Calling the comprehensive India-EU deal very "ambitious", EU chief Ursula von der Leyen said negotiations include everything from "green tech to pharmaceuticals, semiconductors to green hydrogen and defence."
She also called the Indian Ocean the "lifeline for global trade" and said ensuring its security is "vital, not just for India but for the whole world". Emphasising on a global security structure, the European Commission chief said "We should also explore expanding our joint naval exercises, building on our very successful operations in the Gulf of Guinea and the Red Sea."
THE CHALLENGE
The European Union is already India's largest trading partner with two-way trade accounting for more than $137 billion in 2023-24. In the last decade alone - since 2014 - India-EU trade has grown by a massive 90 per cent.
But each time an attempt has been made to have an India-EU comprehensive agreement, it has met hurdles. From India, New Delhi has not been in favour of lowering tariffs in certain industries, while for the EU, it has not been willing to ease visa restrictions currently in place to curb Indian professionals to work in Europe.
While Europe wants tariffs to be cut on the import of cars and bikes as well as whiskeys and wines, India wants Europe to give greater access to Indian pharma firms to supply cost-effective medicines and chemicals across Europe.
India also wants Europe to reduce import tariffs on textiles, garments, leather products. New Delhi also rejects a 20-35 per cent carbon tax imposed on industrial goods such as cement, steel, and aluminum.
THE INDIA-EUROPE CORRIDOR
In another significant update, PM Modi confirmed that detailed discussions were held with European leaders on the strategically important India-Midde East-Europe Corridor or IMEEC as it is often called.
As the name suggests, the project, already being constructed, will connect India to all of Europe through the Middle East (West Asia) via sea, rail, and road. "I am confident that the IMEEC corridor will prove to be an engine to drive global commerce, sustainable growth and prosperity," PM Modi said at the joint press conference.
Both sides agreed to give the project a boost to enhance connectivity and save costs by making it a priority.
(Inputs from Reuters and PTI)
