At the Federation of European Business in India (FEBI) launch in New Delhi, Commerce and Industry Minister Piyush Goyal emphasised the need to eliminate unfair trade practices and irrational standards that act as trade barriers. He pointed out that many duties on steel and aluminium products violate global trade rules.

Goyal criticised unfair trade regulations, such as the Carbon Border Adjustment Mechanism (CBAM), which he believes undermine the Paris Agreement’s commitment for developed countries to support developing nations responsibly. He stressed the importance of viewing trade deficits in a broader context, noting that many European companies operating in India import products from their subsidiaries abroad.

Addressing concerns from Indian companies about difficulties in closing unviable operations and labour disputes in the EU, Goyal highlighted India’s business-friendly environment. He noted that India has been largely free of labour-related issues over the past decade and mentioned the current government’s reversal of retrospective taxation on Vodafone, with assurances that similar actions would not occur in the future. He urged the EU to focus on cooperation rather than retaliation, announcing a dinner meeting with EU ambassadors on October 23 to discuss future steps.

While Goyal pointed out that the vast Indian market of 1.4 billion people could potentially increase bilateral trade to one trillion Euros, EU Ambassador Hervé Delphin acknowledged that progress on the FTA has been limited due to fundamental differences despite nine rounds of negotiations. He called for both sides to recalibrate their expectations and consider potential packages of mutual concessions to advance bilateral trade, stating that any further progress on the FTA will depend on political decisions by the new European Commission, which will convene at the end of 2024.

In addition to the FTA, the EU is also pursuing an Investment Protection Agreement and a Trade and Technology Commission (TTC) with India, its second commission after the one with the US. Scheduled for the end of 2024, the TTC meetings aim to catalyse collaboration in research and development, technology, innovation, and clean technology.

Goyal expressed readiness to meet with the new EU Commissioner for the second TTC to address ongoing trade issues. However, he clarified that the EU should not expect to replicate an FTA with India based on agreements with developed countries, as India requires a transitional period to evolve from a low to a high per capita income country. He also emphasised that the EU should recognise the quality standards of Indian companies and avoid introducing unrelated issues that could hinder FTA negotiations.