India-EU Trade Deal: India and the European Union are set to announce on January 27 the conclusion of negotiations and the finalisation of a free trade agreement aimed at boosting economic ties between the two regions amid disruptions in global trade due to US tariffs, PTI said, citing an official.
The pact is nearing the finishing line after 18 years of negotiations. The talks started in 2007.
Commerce and Industry Minister Piyush Goyal has termed this free trade agreement (FTA) "the mother of all deals" the country has signed so far.
The conclusion of talks for the agreement will be announced in the India-EU (European Union) Summit here, the official said.
European Commission President Ursula von der Leyen landed here on January 24 for a four-day visit. President of the European Council Antonio Costa and von der Leyen will hold summit talks with Prime Minister Narendra Modi on January 27.
Implementation Will Take Time
While India and the 27-nation bloc EU will announce closure of FTA talks this week, it will be signed after legal vetting of the text on a mutually agreed date.
Implementation of the deal may take some time, as it requires approval from the EU Parliament. In India, it requires only the nod of the Union Cabinet.
Likely Impact of the India-EU Trade Deal
The pact is likely to provide duty-free access to several Indian goods from labour-intensive sectors such as textiles, chemicals, gems and jewellery, electrical machinery, leather and footwear.
The EU's tariffs on Indian goods are about 3.8 per cent, but labour-intensive sectors attract about 10 per cent import duty. India's weighted average duty on EU goods is about 9.3 per cent, with particularly high duties on automobiles, parts (35.5 per cent), plastics (10.4 per cent), and chemicals and pharmaceuticals (9.9 per cent).
Both sides are likely to consider extending quota-based duty concessions on cars.
India May Provide Tariff Rate Quota For European Wines
Like for Australia and the UK, India may provide a tariff rate quota on European wines under the agreement. India imposes a duty of 100-125 per cent on alcoholic beverages.
Sensitive agriculture issues have been kept out of the deal. The EU has been protective of its beef, sugar and rice markets. India, on the other hand, has protected its farm and dairy sectors from competition, as the livelihoods of large numbers of small and marginal farmers depend on them.
Also Read: Stock Market Today: Are NSE, BSE Open Today; Check Share Market Holiday Calendar
Dairy Might Be Exempted
Dairy has been excluded from all FTAs that India has signed so far.
In an FTA, two sides reduce or eliminate import duties on over 90 per cent of goods traded between them. An FTA also liberalises norms to promote trade in services sectors such as telecommunications, transportation, accounting, and auditing. The NDA government has finalised seven trade pacts since 2014: Australia, the UK, Oman, New Zealand, the UAE, the EFTA bloc, and Mauritius.
Why India-EU Trade Pact Important?
This pact is important, as the US's imposition of high tariffs has disrupted global trade flows. India is facing steep 50 per cent tariffs. The FTA is expected to help Indian exporters diversify their shipments. It will also help reduce dependence on China.
Besides FTA, the two are also negotiating a pact in investment protection and Geographical Indications (GI). The India-EU FTA covers 24 chapters, including trade in goods, services and investment.
Disclaimer: This story has been directly published from the agency feed (PTI). No changes have been made by the Daily Jagran Team Except The headline and subheads.