The much – awarted India – European Union FTA pact may be delayed further looking at the recent developments. The EU has flagged India’s Russion oil purchase and the joint military drills as “obstacles in our cooperation”, according to the Bloc’s top diplomat Kaja Kallas. Obviously , the EU is under pressure from the Trump Administration. This acts as a hindrance to closer ties between the two countries. The negotiations have been on for nearly two decades now. So some delay looks inevitable.
The EU has rolled out a new strategic agenda to boost bilateral co-operation with India. It also includes security and defence partnership that would also facilitate defence industrial collaboration. Also, envisaged is technology maritime security and counter-terrorism cooperation. Indian PM Modi says that India is ready for the next level in ties with the EU. The EU president Ursula von der Leyen had wanted to upgrade their 2024 strategic partnership with a new comprehensive agenda to offset likely damages from Trumps tariff policy.
However, there is a lot of ground to be covered in the trade negotiations to have the FTA by the year end (2025). Commerce Minister had said “we have been negotiating the FTA for quite some time, but I can tell you that it never got such a “momentum as we have right now between minister Goyal and myself and having a strong political support from both leaders, PM Modi and EU Commission President and EU Trade Commissioner MARCOs Sefocovic said at the ACMA Annual meeting in New Delhi recently.
Indian commerce Secretary Sunil Barathwal considers the UK deal – to be signed soon the “gold Standard” for our future agreements”. German Ambassadar to India Philip Ackermann believes the EU FTA is likely to be a “Game Changer” for many of the industries in the EU bloc and is potentially the largest of its kind in the world.“ The EU deal is also expected to attract more investments into India which has turned out to be a very good partner.
EU Chief said that during the last 20 years, trade with India had tripled. European businessmen are thriving. There are 6000 EU companies in India and have created eight million direct and indirect jobs in the country, as has been reported earlier.
The UK deal signals the areas where India could offer lower duty access for goods entering from the EU. Further, the UK deal signals Indias intent to open aventies to increase exports to other markets. It could also put pressure on other trading partners like the EU to move forward with the trade deal that has been under negotiation for a long time now. The EU bloc also appears very keen than before on concluding the trade deal. Amid the on-going trade tensions, negotiations from both sides had been engaged in discussion to narrow the gaps with Goyal and EU trade commissioner seeking to find solutions on contentious issues at their level.
Goyal said that the EU trade Commissioner “is a tough negotiator, very difficult to get anything past Marcos”. Moreover, every agreement has some”give and take to make it a balanced agreement”. There could never be a perfect situation and “We all agree we should not make the perfect the enemy of the goal”. But I can assure you that the direction in which we are going, the possibilities that we are tying to unlock are immense”.
Both Goyal and Marcos adknowledged that the global environment is tough, pointing to challenges in the past. Goyal urged industry to remain positive. Marcos said that India is fast becoming a “Key engine of global economy” and a strong economic partnership will add significant value to the EU just as Europe’s technology and scale will benefit India’s growth story.
The EU commission President said India and EU will open a new chapter in ties and that she discussed progress in trade talks and how both sides can work together to effectively support Ukraine’s “fight for freedom”.
There was a 6.39 percent growth in India’s textile exports to the EU in the first 10 months of 202425, over the same period of previous year. Commernce Ministry deta shows, In value terms exports were worth dollar 5.66 bn against dollar 5.32 bn in this period. The figures still are far of dollar 5.84 bn in 2022-23. Ready-made garments contributed dollar 3.18 bn leading a jump. Exports of cotton yarn, textiles, made-ups and handlooms totalled dollar 1.10 bn.
As reported earlier, the India Brand equally foundation , a division of the commerce ministry, projects Indian textiles and apparel market to touch dollar 35 bn by 2030 growing at 10 percent compounded aggregate growth. India is also among the top five global exporters in a number of textile categories and is the third largest exporter of clothing and textiles, world wide. By 2030, exports are predicted to surpass dollar 100bn. The textiles and clothing sector account for 12 percent of exports, 12 percent of industrial production and 2.3 percent of GDP.
During the first 7 months of 2024-25, Germany, Italy, Swiden, Finland, Switerland, the UK, Czech Republic, Poland had high demand for textiles. Austria, Greece, Slovania saw first growth in 2023-24. Sweden, the Czech Republic, Bulgaria, Switerland, Poland, the Netherlands and Ireland are important markets. It needs mention that, China and Pakistan are not considered for FTA, while Sri Lanka and Mauritius are among those where India has shown willingness to move a head with talks.
