In a joint event held at the Headquarters of the European Union (EU) at Brussels on 17 June 2022, 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.
In addition, negotiations for an Investment Protection Agreement (IPA) and a GI Agreement were also initiated. An agreement was reached on this in the meeting of leaders of India and the European Union held in Porto on May 8, 2021.
The two partners are now resuming free trade agreement talks after a gap of nearly nine years, as earlier talks in 2013 were abandoned due to differences in the scope and expectations of the deal.
The visit of EU President Ms. Ursula von der Leyen to Delhi in April 2022 and Prime Minister Mr. Narendra Modi's recent visit to Europe gave impetus to the Free Trade Agreement talks and helped set a clear roadmap for the talks.
EU, India's second largest trading partner,
This will be one of the most important free trade agreements for India, as the European Union is India's second largest trading partner after the US.
The India-EU trade turnover registered an unprecedented growth of 43.5 per cent in 2021-22, worth USD 116.36 billion.
India's exports to the EU grew by 57 per cent to $65 billion in FY 2021-22.
India has more trade than prescribed with the European Union.
Both sides are aiming to negotiate and conclude the three agreements in parallel.
The first round of talks for the three agreements will be held in New Delhi from June 27 to July 1, 2022.
MoU signed by India in record time in 2022:
India concluded free trade agreements with Australia and the United Arab Emirates earlier this year in a record time.
Free trade agreement talks are also underway with Canada and the United Kingdom.
Free trade agreement talks are part of India's broader strategy to forge balanced trade agreements with major economies and reform existing trade agreements to improve trade and investment.
Free Trade Agreement (FTA):
An FTA is an agreement between two or more countries to reduce barriers to imports and exports.
Under a free trade policy, goods and services can be bought and sold across international borders, for which provisions such as little or no government fees, quotas and subsidies are made.
The concept of free trade is the opposite of trade protectionism or economic isolationism.