India-EU Free Trade Agreement (FTA): Negotiations Re-launched

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India-EU Free Trade Agreement- Relevance for UPSC Exam

India-EU FTA: India-EU Free Trade Agreement is important part of India’s International Relations and also from its trade and economy’s perspective. India-EU FTA is part of UPSC Mains GS Paper 2 (International Relations- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests) and UPSC Mains GS Paper 3 (Indian Economy- Issues relating to planning, mobilization of resources, growth, development and employment).

India-EU Free Trade Agreement (FTA) in News

Recently, Indian Union Commerce Minister and Executive Vice-President of European Commission formally re-launched the India-EU Free Trade Agreement (FTA) negotiations.
Besides, negotiations were also launched for a stand-alone Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement.

About Free Trade Agreements (FTA)

The FTA negotiations are part of India’s broader strategy to forge balanced trade agreements with key economies and revamp existing trade pacts to improve trade and investment.
India earlier this year has concluded FTAs with Australia and the UAE in a record time. The FTA talks with Canada and the UK are also underway.

India-EU Free Trade Agreement (FTA)

Background: Negotiations on India-EU Bilateral Broad-based Trade and Investment Agreement (BTIA) (Also known as India-EU FTA) started in 2007 but later got stuck due to differences on various issues.
- India-EU are now resuming the FTA talks after a gap of about nine years since the earlier negotiations were left off in 2013 due to difference in the scope and expectations from the deal.
India-EU Leaders’ Meeting 2021: an agreement was reached for-
- Resuming negotiations for a balanced, ambitious, comprehensive and mutually beneficial FTA and
- Starting fresh negotiations on the IPA and a separate agreement on GIs.
India-EU Trade: The India-EU merchandise trade has registered an all-time high value of USD 116.36 Billion in 2021-22 with a year-on growth of 43.5%.
- India’s export to the EU jumped 57% in FY 2021-22 to $65 billion.
- India has a surplus trade with EU.
Discussion on India-EU FTA: India-EU are aiming for the trade negotiations to be broad-based, balanced and comprehensive, based on the principles of fairness and reciprocity.
- There will also be discussions on resolving the Market Access Issues which are impeding the bilateral trade.
Significance: India-EU FTA would be one of the most significant FTAs for India as EU is its second largest trading partner after the US.
- India-EU trade deal will help to diversify and secure the supply chains, boost economic opportunities for our businesses, and bring significant benefits to the people.

India- EU IPA and GIs

India- EU IPA: The proposed India-EU Investment Protection Agreement (IPA) would provide a legal framework for cross-border investments to enhance the confidence of investors.
India-EU GIs: GI pact is expected to establish a transparent and predictable regulatory environment, to facilitate trade of GI products including handicrafts and agri-commodities.