India and the EU will likely hold the next round of negotiations for a proposed free trade agreement (FTA) in early October in Brussels, a senior government official told FE, as the two sides seek to expedite talks to hammer out a deal by next fiscal.
India is expected to submit its master negotiating text to the EU in October for further discussion, another source said.
After a gap of about nine years, both the sides resumed the much-awaited negotiations in June for a “new-age” FTA that would cover a number of areas, beyond just goods, services and investments. Discussions are likely to take place on as many as 18 policy areas. The EU is learnt to have submitted its own negotiating text to India in June.
India’s experience of negotiating a modern FTA with an advanced economy like the UK will come in handy in its talks with the EU as well, one of the sources said. Still, despite firm commitments from both the sides, a deal with the EU will take longer, thanks to sticky market access issues, on top of the complexity of negotiating with bloc whose 27 members may not necessarily have common ambitions in several aspects of trade, sources said. India and the UK, meanwhile, have set the Diwali (October 24) deadline for clinching an FTA, formal negotiations for which started only in January.
Both the sides the sides would first take stock of the progress made so far and discuss how to proceed further. “It makes sense to focus on points of convergence first before moving on to the contentious matters,” one of the sources had said.
In the last round, 52 technical sessions covering various areas of negotiations and seven sessions on investment protection and geographical indications were held.
Formal negotiations between the two sides for the FTA were stuck over stark differences after 16 rounds of talks between 2007 and 2013. The EU insisted that India scrap or slash hefty import duties on sensitive products such as automobiles, alcoholic beverages and dairy products, and open up legal services.
Similarly, India’s demand included greater access to the EU market for its skilled professionals, among others. However, both the sides have now decided to take the negotiations to their logical conclusion. The EU, even after the Brexit, continued to be India’s largest export destination (as a bloc) in FY22, although it has lost some appeal. The country’s outbound shipments to the EU jumped 57% on year in FY22 to $65 billion, albeit on a contracted base. Similarly, its imports from the EU jumped 29.4% last fiscal to $51.4 billion.