India and the European Union have re-launched negotiations for a free trade agreement (FTA), almost nine years after discussions were put on hold due to New Delhi’s objections to demand for a greater market access to European imports such as cars, farm products, wine and spirits.
A press release from the Indian Ministry of Commerce and Industry said on Saturday that the FTA negotiations were “formally re-launched” at a joint event in Brussels attended by Indian Commerce Minister Piyush Goyal and Valdis Dombrovskis, Executive Vice-President of European Commission.
The first round of negotiations between the interlocutors will take place in New Delhi on 27 June, the release stated.
“Both partners 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,” the official release noted.
It said that both the sides are hoping to resolve “market access issues” which have impeded biliterate trade between India and the multi-nation economic union.
The EU was India’s largest trading partner in 2019, and also accounted for the highest foreign investment in the country. For the EU, trade with India constitutes two percent of its overall share.
Talks for an FTA were first launched in 2007.
New Delhi has further said that negotiations for a “standalone Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement” were also launched by the two delegates on Friday. Negotiations for the three pacts will be held “simultaneously”, the government said.
The Indian government has expressed hope that the proposed IPA “would provide a legal framework for cross-border investments” between the 27-nation bloc and the South Asian economy.
The GI pact, on the other hand, is expected to set-up a “transparent and predictable regulatory environment” to facilitate trade in handicrafts and agricultural products.
The announcement by the Indian government comes almost a year after Delhi and Brussels agreed in principle to resume FTA talks after a summit between Prime Minister Narendra Modi and his European counterparts, European Council President Charles Michel and President of the European Commission Ursula von der Leyen, as well as the leaders of all 27 EU member states. The virtual meeting took place last May.
New Delhi says that the visit of European Commission President Ursula von der Leyen in April and Prime Minister Narendra Modi’s three-nation trip to Europe in May has “accelerated the FTA discussions and helped in defining a clear roadmap for the negotiations”.
India has this year also concluded two FTAs with Australia and the United Arab Emirates, and is holding talks for two similar trade agreements with Canada and the United Kingdom (UK).