The next round of free trade agreement (FTA) talks between India and the European Union is slated from May 12 to 16 and both sides are pushing for early resolution of FTA with the latter seeking reduced tariffs on key exports such as whisky, wine, and automobiles, while India is wanting tariff drop on textiles.

The EU is negotiating on tariffs on cars, whisky and wine to be brought down from 150% to 100%. Away from the EU, Australia was able to negotiate a deal with India for reduced duties for premium wines. However, European exporters opine that India remains one of the toughest wine markets due to state-level excise duties that further raise costs.

India, on the other hand, is pushing for reduced tariff on textile exports. Presently, India is hit by an additional 10% tariff on textile exports, in the absence of an FTA. Bangladesh and Vietnam, strong textile markets, are benefitting, as the former concluded in 2001 an EU-Bangladesh Cooperation Agreement, while Vietnam and EU signed the FTA in 2020.

After an eight-year hiatus, talks between India and the EU resumed in June 2022. The bilateral trade between the two surpassed US$200 billion in 2023. India exported US$75.18 billion in goods and US$31.13 billion in services to the EU, while imports from the EU stood at US$63.44 billion in goods and US$31.35 billion in services.

The Additional Secretary in the Department of Commerce L Satya Srinivas said that the tenth round of talks focussed on areas like market access offers in goods, services, investment. He said, “Both sides have agreed to accelerate efforts to advance the negotiations.”