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.
India- European Union Relations