India and EU Set to Finalize Free Trade Agreement by Year-End

India plans to finalize a free trade agreement with the EU by year-end under the leadership of Modi and von der Leyen. The agreement aims to strengthen trade ties, with both sides seeking reduced tariffs and increased investments. The discussions also included aspects of defense and shared regional security concerns, emphasizing the growing importance of this partnership.

India is set to finalize a mutually advantageous free trade agreement (FTA) with the European Union (EU) by the end of 2023, as announced by Prime Minister Narendra Modi following a meeting with EU Commission President Ursula von der Leyen in New Delhi. During this two-day visit, von der Leyen expressed the EU’s desire to strengthen trade relations and emphasized the importance of a swift agreement to enhance access to India’s growing market.

The EU currently stands as India’s largest trading partner, with bilateral trade in goods reaching approximately 124 billion euros in 2023, representing over 12 percent of India’s total trade. While the Indian market has substantial potential in sectors such as defense, agriculture, automotive, and clean energy, it only constitutes 2.2 percent of EU goods trade due to high tariffs.

Von der Leyen highlighted the EU’s objective to lower trade barriers on imports including automobiles and alcoholic beverages, while India seeks increased EU investment in clean energy and infrastructure. Alongside trade negotiations, India also wishes for easier mobility opportunities for its skilled workforce and more foreign investments.

The delegation’s talks also included a collaborative security and defense partnership, introducing a framework akin to those established with Japan and South Korea. Von der Leyen noted shared concerns regarding China’s influence in the Asia-Pacific and the significance of resilient supply chains, as well as governance related to emerging technologies such as artificial intelligence.

The discussions also touched upon various pressing global issues, including Russia’s military actions in Ukraine. Despite Western pressures, India maintains its ties with Russia, which remains its primary source of military supplies. Modi emphasized the ongoing dialogue on enhancing defense exchanges and diversifying military manufacturing in India.

In conclusion, this historic visit marks a new chapter in India-EU relations, with important decisions made encompassing trade, technology, security, and economic growth. Modi’s remarks reflected a commitment to a collaborative future aimed at stability and prosperity in the Asia-Pacific region, underscoring the strategic significance of this partnership moving forward.

In summary, India and the EU are poised to finalize a significant free trade agreement by the end of the year, enhancing mutual access to markets and boosting investment opportunities. The discussions not only focus on trade relations but also on security partnerships and addressing regional challenges, especially in the context of China’s influence. This collaboration is vital for both parties, showcasing a united approach towards economic growth and stability in the Asia-Pacific.

Original Source: www.rfi.fr