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European Union

India Pursues Trade Deals with EU and Other Markets Amidst Global Uncertainty

Strategic Insights

— 1 min read

As India grapples with 50% tariffs on exports to the US, the nation is making strides in trade negotiations with the European Union (EU). Prime Minister Narendra Modi and EU leaders have expressed a shared goal of concluding the India-EU Free Trade Agreement by the end of this year. This development comes as India deepens its trade relationships with other markets, including Australia and the UAE, in response to the uncertain global trade landscape. The EU presents a significant opportunity for India, with bilateral trade in goods standing at $137.41 billion in 2023-24 and services at $51.45 billion. The nation is seeking concessions from the EU similar to those granted by the US and must navigate contentious issues in agriculture, dairy, and the EU's Carbon Border Adjustment Mechanism.

Key Takeaways:

  • India is pushing forward with trade talks with the EU despite ongoing tensions with the US, with top EU negotiators set to visit India this week.
  • The India-EU Free Trade Agreement aims to address contentious areas such as agriculture, dairy, and the EU's Carbon Border Adjustment Mechanism.
  • Delhi is seeking concessions similar to those received by the US, including exemptions from the carbon mechanism, which impacts sectors like steel, cement, and automobiles.
  • India has already signed trade agreements with Australia and the UAE, and is now seeking greater integration with supply chains in East and Southeast Asia.
  • The Comprehensive and Progressive Agreement for Trans-Pacific Partnership presents an opportunity for India to join a trade pact with a group of high-income economies.

Statistics:

  • Bilateral trade in goods between India and the EU stood at $137.41 billion in 2023-24.
  • Services trade between India and the EU was valued at $51.45 billion in 2023.
  • FDI flows from the EU to India were $107.27 billion between April 2000 and December 2023.
  • The India-EU Free Trade Agreement has 27 chapters, with negotiations reportedly concluded on 11.

Sources:

  • This paper's report on September 4, Prime Minister Narendra Modi and European Union leaders' discussion on the India-EU Free Trade Agreement.
  • This paper's report on the EU's Carbon Border Adjustment Mechanism's impact on sectors like steel, cement, and automobiles.
  • This paper's report on India's FDI inflows from the EU between April 2000 and December 2023.

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