Trade War and FTA Negotiations
The escalating trade war, fueled by US President Donald Trump’s tariff threats, is prompting the EU and UK to accelerate FTA negotiations with India. Commerce Minister Piyush Goyal is set to meet UK and EU officials to advance these discussions.
India-UK FTA Discussions
- Scheduled meetings between Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds.
- Renewed focus on India-UK FTA talks initially launched over three years ago under former British Prime Minister Boris Johnson.
- Negotiations began in January 2022, with significant delays due to political instability and unresolved issues.
- The 15th round of talks is set to begin after more than a year.
India-EU FTA Negotiations
- Goyal is scheduled to engage with EU Trade Commissioner Maros Sefcovic ahead of the 10th round of talks in Brussels.
- European Commission President Ursula von der Leyen will visit India, accompanied by 28 commissioners to bolster the FTA discussions.
- India-EU FTA negotiations were launched in June 2022, with slow progress due to fundamental differences.
Geopolitical and Economic Implications
- Experts suggest that geopolitical uncertainties, especially the US trade war, encourage EU nations to explore new markets like India.
- India stands to benefit from stronger economic ties with advanced economies like the UK and the EU.
- Europe views India as a like-minded partner, aiming to deepen strategic and economic relationships.
Impact of US Trade Policies
- Trump’s protectionist policies include imposing tariffs on imports from countries like China, Mexico, and Canada.
- These policies aim to address the US trade deficit with countries including China, Mexico, EU, and Canada.
- China has retaliated, and the EU has warned of strong retaliation against US tariffs.
Trade Statistics
- India's exports to the EU stood at $76 billion in FY24, accounting for 17% of India’s exports.
- Exports to the UK were $13 billion, representing a 2.9% share in FY24.