Mutual trust needed to overcome trade barriers to seal EU FTA, says Piyush Goyal

Commerce Minister Piyush Goyal

Concrete steps are required to expedite the talks to conclude a Free Trade Agreement (FTA) between India and the European Union (EU), commerce minister Piyush Goyal said on April 11.

Both sides need a deeper understanding of the barriers holding back the pact, he said amid growing concerns about global trade upended by American on and off tariffs.

"I believe concrete steps need to be taken to expedite the conclusion of the FTA between India and EU... that will need both EU, its member-states and India to work in a spirit of cooperation to develop a mutual trust and deeper understanding of the trade barriers which are holding back the trade agreement between us," Goyal said at the Italy-India Business, Science and Technology Forum.

The minister has in the past, too, referred to trade barriers in relation to EU, specifically the Carbon Border Adjustment Mechanism (CBAM), which is expected to increase the cost for some Indian exports, including steel and fertiliser.

In March, the European Commission proposed to simplify CBAM based on lessons from its 2023–2025 trial run, aiming to reduce paperwork and lower the administrative burden, especially for very low-value shipments.

In February, India and EU agreed to ramp-up talks for the trade deal and close it by 2025-end to tide over impending troubles from tariffs.

The decision was taken during European Commission president Von der Leyen’s two-day India visit with a 27-member delegation in February.

Negotiations for the proposed trade deal were re-launched in June 2022.

India and EU have conducted ten rounds of talks since then, with the last one held in March this year.

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-country bloc is the second-largest destination for Indian exports after the United States.

India is EU’s ninth-largest trading partner, accounting for 2.2 percent of its total trade in goods in 2023, well behind the US, China and the UK.

Goyal said, "Looking at the scope and extent of our bilateral trade, both in goods and services...I think there is tremendous potential to grow from the $15 billion level we have achieved so far."

This can be done by encouraging investments on between India and Italy and promoting businesses to trade with each other without roadblocks, Goyal added.