India, EU Make Headway in Trade Talks, Early Harvest Deal Possible by July

Strategic Insights -

India and the European Union (EU) have accelerated their trade talks, with a government official stating that an early harvest deal under the free trade agreement could be concluded by July this year. This early harvest would cover key areas such as intellectual property rights (IPRs), government procurement, tariff, and non-tariff barriers. Separate talks for an Investment Protection Agreement and an Agreement on Geographical Indications are also underway. The India-EU trade pact negotiations cover 23 policy areas, including trade in goods, services, investment, and sustainable development.

Key Takeaways:

  • The early harvest deal under the free trade agreement between India and the EU is expected to cover IPRs, government procurement, tariff, and non-tariff barriers.
  • Separate talks for an Investment Protection Agreement and an Agreement on Geographical Indications are underway.
  • India-EU trade pact negotiations cover 23 policy areas, including trade in goods, services, investment, rules of origin, IPR, government procurement, dispute settlement, and sustainable development.
  • Indian trade negotiators are visiting Brussels this week for the next round of FTA negotiations.
  • The EU has sought duty cuts in automobiles, medical devices, wines, spirits, meat, and poultry, besides a robust intellectual property regime.
  • The EU also wants to include its Carbon Border Adjustment Mechanism (CBAM) and Deforestation Regulation (EUDR) in the pact's purview, which New Delhi opposes.
  • India has stated that it will impose retaliatory duties if the EU imposes a carbon tax on Indian goods.

Statistics:

  • 23: The number of policy areas covered in the India-EU trade pact negotiations.
  • 20-35%: The tax rate imposed by the EU's Carbon Border Adjustment Mechanism (CBAM) on select imports into the bloc from January 1, 2026.
  • 2026: The year from which the EU's CBAM is expected to come into effect.
  • July: The target month for concluding the early harvest deal under the free trade agreement.

Sources:

  • [Government official statement on May 17, 2023]
  • [India-EU trade pact negotiations press release on May 16, 2023]