India and the 27-nation European Union (EU) bloc will start the tenth round of negotiations for a proposed free trade agreement from Monday in Brussels amid Trump tariff threats, according to an official.
The talks are expected to focus on resolving remaining issues so that the agreement can be finalised by the end of this year.
During the recent visit of EU Commissioner for Trade and Economic Security Maros Sefcovic, the two sides have discussed ways to accelerate efforts towards a balanced and mutually beneficial trade pact.
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen last month agreed to conclude the ambitious India-EU free trade deal by this year.
According to the think tank Global Trade Research Initiative (GTRI), key sticking points include agricultural tariffs, especially on dairy and wine import duties, automobile tariffs, and regulatory barriers affecting labour-intensive goods.
India is reluctant to lower auto import duties and is cautious about committing to EU demands on sustainability and labour standards. Services trade remains another contested area, with India seeking easier mobility for professionals and data security recognition under the EU’s GDPR framework (General Data Protection Regulation).
Climate stand a worry
The European Union’s (EU) aggressive environmental regulations, particularly the carbon tax, deforestation rules, and supply chain due diligence laws are one of the biggest hurdles in the negotiations for a proposed trade pact with India, GTRI added.
It said that these regulations could impose additional costs on Indian exports.
Under the Carbon Border Adjustment Mechanism (CBAM), Indian exports of steel, aluminium, and cement to the EU could face tariffs of 20-35 per cent, even if an FTA is signed.
This raises concerns that while EU goods would enter India duty-free, Indian exports would still face these indirect barriers in Europe, it added.
GTRI founder Ajay Srivastava said India is pressing for clear exemptions or compensatory measures within the FTA to neutralise the impact of CBAM and related rules.
Italy bullish
Italian agriculture minister Francesco Lollobrigida has called for the consolidation of reciprocal trade relations with India, highlighting the very strong relationship between the two governments. His remarks came against the backdrop of the two-day ‘Vinitaly’ trade promotion fair India Roadshow that began on Saturday.
