Syllabus: GS2/International Relations
Context
- India and the European Union (EU) chief negotiators have concluded another round of talks on the proposed free trade agreement (FTA) and agreed to reach a deal in two phases.
India-EU Free Trade Agreement (FTA) Negotiations Overview
- Negotiation Resumption: Talks resumed in June 2022 after an 8-year hiatus (stalled in 2013 due to market access disagreements).
- Objective: To finalize a comprehensive trade agreement covering goods, services, investments, and geographical indications.
- Negotiation Structure: The agreement will be concluded in two phases, following India’s phased approach used in previous FTAs (e.g., with Australia).
- This is partly due to the volatile global trade environment, including US tariff actions.
- Prime Minister Narendra Modi and the European Commission President agreed to seal the deal by the end of this year.
Key Focus Areas
- Market Access: Duty cuts demanded by the EU in automobiles, medical devices, wines, spirits, meat, and poultry.
- Services and Investments: The talks focused on areas like market access offers in goods, services, and investment.
- Regulatory Aspects: Stronger Intellectual Property Rights (IPR) framework.
- Agreements on sanitary and phytosanitary measures, technical barriers to trade, customs, government procurement, and sustainability.
Potential Benefits
- Increased competitiveness for Indian exports like ready-made garments, pharmaceuticals, steel, petroleum products, and electrical machinery.
- Stronger investment protection and clearer dispute settlement mechanisms.
- Enhanced bilateral cooperation in innovation and sustainable development.
India-EU relations
- Political cooperation: India-EU relations date to the early 1960s, and a cooperation agreement signed in 1994 took the bilateral relationship beyond trade and economic cooperation.
- The first India-EU Summit, in 2000, marked a watershed in the evolution of the relationship.
- At the 5th India-EU Summit at The Hague in 2004, the relationship was upgraded to a ‘Strategic Partnership’.
- Economic cooperation : India’s bilateral trade in goods with the EU was USD 137.41 billion in 2023-24, making it the largest trading partner of India for goods.
- EU is India’s largest trading partner for goods, 17% of India’s exports go to the EU and 9% of EU exports come to India.
- Other areas of cooperation:
- The India-EU Water Partnership (IEWP), established in 2016, aims to enhance technological, scientific, and policy frameworks in water management.
- In 2020, there was an agreement for research and development cooperation in the peaceful uses of nuclear energy between the European Atomic Energy Community and the Government of India.
- India and the EU established the Trade and Technology Council (TTC) in 2023. The TTC is a forum for the two parties to collaborate on trade, technology, and security. The TTC’s goals.
| European Union – The European Union (EU) is a political and economic alliance of 27 countries. – Background: The EU traces its roots to the European Coal and Steel Community, which was founded in 1950 and had just six members: Belgium, France, Germany, Italy, Luxembourg, and the Netherlands. 1. It became the European Economic Community in 1957 under the Treaty of Rome and subsequently was renamed the European Community (EC). 2. European Union (EU), Organization of European countries, formed in 1993 to oversee their economic and political integration. 3. It was created by the Maastricht Treaty and ratified by all members of the European Community (EC), out of which the EU developed. – It promotes democratic values in its member nations and is one of the world’s most powerful trade blocs. – 20 of the countries share the euro as their official currency. |
Source: BS
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