EU needs to rethink on including climate norms in FTA, says Minister Goyal
This story was originally published at 19:12 IST on 11 April 2025
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Informist, Friday, Apr. 11, 2025
NEW DELHI – The European Union needs to rethink its stance on the inclusion of non-trade issues like climate regulations for it to seal the deal on the proposed free trade agreement with India "amicably", Commerce and Industry Minister Piyush Goyal said Friday. "Any self-respecting decent country cannot sign up on commitments which are irrational and beyond the realm of trade," Goyal said.
"In my humble opinion, Europe, today, is in a crisis because of the severity of the non-tariff barriers it has created," Goyal said at the Global Technology Summit in New Delhi. "Unless Europe recognises the path that they are going downhill, I see serious difficulty with Europe to do trade with any country, forget India."
India and the EU have set the target to conclude the discussions for the free trade agreement by the end of 2025. Except for non-trade issues and non-tariff barriers, the rest of the matters between India and the EU can be sorted "amicably", Goyal said. The two sides held the last round of talks in March in Brussels.
The EU's proposal of a Carbon Border Adjustment Mechanism and regulation on deforestation products have been some of the sensitive issues for India in the talks. India sees the EU measures to mitigate climate change as non-tariff barriers.
Under the proposed deforestation regulations, effective 2026, products exported to the EU will have to meet rules relating to the land on which they were produced. Exporters will have to ensure that the land has not been subjected to deforestation or forest degradation since Dec. 31, 2020.
Under the Carbon Border Adjustment Mechanism, those exporting goods to the EU have to report the carbon content of the commodity, which will determine the tax on it. The carbon tax collection is expected to begin in 2026. These measures by the EU may affect the profitability of Indian exporters, as Europe is among the top export destinations for the country. India's total trade with the EU was $137.41 billion in 2023-24 (Apr-Mar), with imports at $61.48 billion and exports at $75.93 billion. End
US$1 = INR 86.04
Reported by Krity Ambey
Edited by Saji George Titus
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