India is pushing for tariff reductions on labour-intensive exports such as textiles, leather and gems and jewellery as part of the talks for a free trade agreement with the European Union (EU), a government official said.
The EU imposes an average tariff of 15-25 percent on Indian gems and jewellery exports, while leather products can attract a duty of high as 17 percent and for textiles it is at 10-12 percent.
“India is interested in labour-intensive products like textiles, leather, gems and jewellery, we are pushing for it (tariff cuts). That is why talks take time because we have to converge to get the best deal mutually,” this official said.
On the other hand, the 27-nation bloc is keen to secure reductions in tariff rates on automobiles and wines.
“EU has 27 countries and each and every country has a different concern, like auto is a major concern for some of their large countries, while wine is also a concern for other large countries in the bloc,” the official said.
India currently levies a 150 percent tariff on wines from the European bloc, while the import duty on completely built-up (CBU) passenger vehicles is 110 percent for cars costing over $40,000, and 70 percent for cars costing up to $40,000.
In 2023-2024, the EU exported $416 million worth of wines to India. Its automobile and auto parts exports exceeded $2 billion, including $416 million in fully built-up (CBU) vehicles.
Most EU car exports to India come in completely knocked-down (CKD) form, attracting a 15 percent tariff for local assembly and sale. Such exports to India, including auto components, totalled over $1.4 billion.
India and EU held the 13th round of talks for the proposed trade deal from 8-12 September in which significant convergences were achieved in many areas, the commerce ministry said on September 15.
The next round of talks will be held in Brussels from October 6-10 as both sides aim to conclude negotiations at the earliest.
In February 2025, India and the EU decided to ramp up talks for the proposed free trade agreement, targeting to close it by the end of 2025 to tide over ongoing disruptions from volatile trade policies.
The EU is India's largest trading partner, accounting for 12.2 percent of Indian trade, ahead of the US (10.8 percent) and China (10.5 percent). The 27-nation bloc is the second-largest destination for Indian exports after the United States.
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