India-EU Free Trade Agreement (FTA) Negotiations
Amidst strained trans-Atlantic relations and reciprocal tariffs from the US, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen have directed negotiators to finalize the India-EU Free Trade Agreement by the end of 2025.
- The initiative aims to diversify exports in response to tariffs announced by US President Donald Trump.
- Modi emphasized the partnership as "historic and unparalleled," focusing on shared values and global betterment.
- Von der Leyen highlighted the opportunity for Europe and India to reimagine their partnership amidst global challenges.
Trade Context and Significance
A potential FTA would be the largest of its kind globally, with both leaders expressing commitment to timely and determined efforts.
- As of the previous year, EU-India goods exchange amounted to EUR 120 billion, with trade tripling over the past two decades.
- The Federation of European Businesses in India consists of 6,000 EU companies, creating 8 million jobs.
Strategic Relationship and Discussions
Post-bilateral meetings, Modi highlighted the strategic relationship with the EU, involving 20 ministerial-level meetings in sectors such as trade, technology, investment, and security.
- The FTA negotiations, initiated in 2007 and relaunched in 2021, now have a set deadline, akin to the Indo-US trade deal timeline.
- Discussions also included the geopolitical context, with a focus on Ukraine's situation and the need for security cooperation.
Geopolitical Considerations
Von der Leyen addressed the broader geopolitical implications, emphasizing the significance of peace and security amidst global conflicts, particularly in Ukraine.
- Europe's response includes historical support for Ukraine and increased defense expenditure.
- Potential Security and Defence Partnership with India, similar to those with Japan and South Korea, is being explored.
Technological and Infrastructure Cooperation
The discussions also covered collaboration in technology sectors such as semiconductors, AI, high performance computing, and 6G.
- The India-Middle East-Europe Economic Corridor (IMEEC) was discussed, with aspirations to enhance connectivity and commerce.
- Von der Leyen described the IMEEC as a "modern golden road," proposing faster trade routes, energy links, and digital connectivity.
Meeting Outcomes
The meeting was attended by the EU College of Commissioners, marking their first joint visit to India, and involved high-level discussions with Indian cabinet ministers.
- Key issues included potential concessions on automobile duties, amidst a European car sector crisis.
- The Trade and Technology Council (TTC) meeting emphasized the need for focused discussions, particularly on semiconductors.