The recent visit of an EU delegation to New Delhi highlights significant advancements in discussions surrounding a future trade agreement between the European Union and India. Agriculture Commissioner Christophe Hansen joined Trade Commissioner Maroš Šefčovič in a high-level meeting aimed at representing EU farmers’ interests. The main focus of their discussions includes security, defense, and foreign policy issues, but the last-minute inclusion of agriculture and food topics signals a crucial shift in negotiations, suggesting that the talks are approaching their final stages. According to sources in Brussels, the agenda adjustment indicates optimism regarding an eventual agreement, with the involvement of key political figures marking a transition into a critical phase of the negotiation process.
The expected discussions will revolve around an extensive agri-food market access offer and the EU-India Geographical Indications (GIs) agreement, alongside broader agricultural cooperation. Essential aspects like sanitary and phytosanitary standards, public procurement, and non-tariff barriers are also poised to be points of contention. Notably, the negotiation is set to tackle some challenging issues such as wine and spirits, processed agricultural products, dairy, sustainability commitments, and business visas. A seasoned EU trade negotiator summarized the mood by referencing history, signaling that they might be nearing the final stages of negotiation, thereby building a sense of urgency and purpose.
To finalize the agreement, India is expected to push for concessions from the EU on agricultural matters. This demand arises from India’s concern over unfair competition from foreign imports as the country’s agricultural sector is largely subsistence-based and consists predominantly of small farms. This apprehension is not new; India faced similar challenges during its negotiations with the United States. Anunita Chandrasekar, from the Centre for European Reform, underscores this concern, emphasizing India’s need for protection against potentially disruptive foreign competition in agriculture.
Additionally, the backdrop of the ongoing global trade tensions plays a vital role in shaping these discussions. The EU’s close engagement with India has been partly catalyzed by the United States’ aggressive tariff policies, which have prompted New Delhi and Brussels to explore stronger collaborative ties. Despite this, the U.S. has urged the EU to impose sanctions on India over its continued purchase of Russian oil, further complicating the political landscape. The overarching aim is to solidify the partnership by sealing a trade deal by the end of the year, a goal reinforced by EU Commission President Ursula von der Leyen’s visit in February to mend and advance bilateral relations.
Another contentious issue at the forefront of negotiations is the EU’s Carbon Border Adjustment Mechanism (CBAM), which India classifies as a form of “green protectionism.” This mechanism poses a significant barrier for developing economies like India, where major export sectors such as steel and aluminum are heavily carbon-intensive. Chandrasekar argues that the CBAM could act as a de facto tariff against Indian exports, complicating efforts to reach an equitable agreement. As both parties engage in dialogue, finding mutually beneficial solutions to contentious climate-related measures is critical for fostering a harmonious trade relationship.
The path forward may hinge upon the strategic borrowing of frameworks from existing agreements, like the EU-Mercosur deal, which has provisions allowing parties to revisit negotiations upon the imposition of unilateral trade barriers. This strategic flexibility could empower negotiators to address evolving concerns while preserving their core interests. As the deliberations continue, both the EU and India find themselves honing their proposals and calculations, emphasizing that the most tangible compromises might only arise in the closing rounds of the discussions. The outcome of these negotiations could significantly reshape the trading landscape between the EU and India, setting new precedents for future collaborations.
