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Informist, Friday, Dec. 20, 2024

NEW DELHI – Commerce and Industry Minister Piyush Goyal on Thursday spoke to the newly-appointed European Commissioner for Trade and Economic Security Maros Sefcovic over a video call and discussed the proposed free trade agreement between India and the European Union. "Minister Goyal underlined that non-tariff barriers were impeding trade and emphasised the need to address long-pending issues as a confidence building measure," the commerce ministry said in a release on Friday. "Both sides agreed to explore a balanced, equitable, ambitious and mutually beneficial FTA."

The European Union's proposed Carbon Border Adjustment Mechanism and regulation on deforestation products are seen as the non-tariff barriers for trade between the two countries. India and the European Union held the last round of negotiations in September, in which they discussed the carbon tax proposed by the latter.

Under the regulation on deforestation, which will come into effect in 2026, products exported to the European Union will have to meet new rules relating to the land on which they were produced. Exporters will have to ensure that the land has not been subject to deforestation or forest degradation since Dec. 31, 2020.

Under the Carbon Border Adjustment Mechanism, those exporting goods to the European Union have to report the carbon content of the commodity, based on which, they will be taxed. The carbon tax collection is expected to begin from 2026. These measures by the European Union may affect the profitability of Indian exporters, as Europe is among the top export destinations for the country. India's total trade with the European Union's was $137.41 billion in 2023-24 (Apr-Mar), with imports at $61.48 billion and exports at $75.93 billion.

After a gap of nine years, India and the European Union initiated talks for a trade agreement in June 2023. In 2007, they had launched negotiations for a broad-based trade and investment agreement, but those discussions were suspended in 2014 following differences over market access.  End

US$1 = INR 85.05

Reported by Krity Ambey

Edited by Ashish Shirke

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