EU FTA to be comprehensive, not interim: Officials

Economic Times

2 days ago

Synopsis India and the EU are negotiating a comprehensive free trade agreement. It will not include an early harvest deal. Discussions are ongoing regarding Geographical Indications. Investment protection is also being discussed. Both sides are addressing concerns like the EU's carbon border adjustment mechanism. India may impose retaliatory duties if the EU imposes a carbon tax. The India-EU free trade agreement (FTA) is likely to be a comprehensive one without any early harvest deal or a pact on Geographical Indications or an investment protection agreement, officials said.
ADVERTISEMENT The two sides are also discussing if any exemptions or carve-outs can be given to India on the EU's carbon border adjustment mechanism (CBAM) and officials said talks on the issue were going on.
"The FTA will be a comprehensive one. These are dynamic issues," said an official.
India and the EU aim to close the negotiations for the trade pact by the end of December. Commerce and industry minister Piyush Goyal said the talks can be concluded earlier than that but there are certain sensitive issues on both sides that must be resolved.Separate negotiations for an Investment Protection Agreement and an Agreement on Geographical Indications since June 2022 are also underway.New Delhi has concerns related to certain practices and regulations of the EU such as CBAM and EUDR while the bloc held that India's quality control orders were a challenge. "On CBAM, talks are going on," said another official.
ADVERTISEMENT India has already said it will impose retaliatory duties if the EU imposes carbon tax on Indian goods. The EU's CBAM is expected to translate into a 20-35% tax on select imports into the bloc from January 1, 2026, and will impact the cement, iron and steel, aluminium, fertiliser, electricity and hydrogen sectors.
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