India-EU Free Trade Agreement Gets Year-End Deadline, Europe Corridor Gains Momentum

New Delhi: India and the European Union have set a year-end deadline to finalize a long-pending free trade agreement, aiming to boost economic ties. The announcement was made in a joint statement by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen after their meeting in New Delhi.

Key Highlights of India-EU Talks

• Free Trade Agreement (FTA): Both sides have resumed discussions on a trade pact after previous attempts stalled in 2013 and 2021. The agreement aims to enhance trade in sectors such as green technology, pharmaceuticals, and semiconductors.
• India-EU Partnership Roadmap: A long-term roadmap for collaboration beyond 2025 will be launched at the next India-EU summit.
• Security & Naval Cooperation: The EU emphasized the importance of securing global trade routes, including joint naval exercises in key regions like the Red Sea.

Challenges in the Trade Deal

While the EU is India’s largest trading partner, with bilateral trade exceeding $137 billion in 2023-24, both sides face hurdles:

• Tariff Reductions: The EU seeks lower tariffs on cars, bikes, and luxury goods, while India wants better access for its pharmaceutical and textile industries.
• Visa Restrictions: India is pushing for relaxed visa norms for its professionals working in Europe.
• Carbon Tax Dispute: India opposes the EU’s 20-35% carbon tax on industrial goods like cement and steel.

India-Europe Corridor (IMEEC) Gets a Push

A major focus of the talks was the India-Middle East-Europe Corridor (IMEEC), an infrastructure project connecting India to Europe via the Middle East through sea, rail, and road networks. PM Modi expressed confidence that the corridor would “drive global commerce, sustainable growth, and prosperity.”

Both India and the EU have agreed to prioritize the project to improve global connectivity and reduce trade costs.