India plans to finalize a mutually beneficial free trade agreement with the EU by the end of the year, enhancing economic ties. Prime Minister Modi and EU chief Ursula von der Leyen highlight India’s market opportunities and EU investments in key sectors. Discussions also involve security cooperation and shared concerns about global stability.
India is set to finalize a beneficial free trade agreement (FTA) with the European Union (EU) by year-end, confirmed Prime Minister Narendra Modi after discussions with EU chief Ursula von der Leyen. This decision aims to enhance bilateral trade and economic ties, particularly as the EU seeks to strengthen its position amid shifting global relations.
The EU is India’s largest trading partner, contributing significantly to India’s trade with over 124 billion euros ($130 billion) in goods in 2023, representing more than 12% of India’s total trade. However, India’s market, although vast, accounts for just 2.2% of EU’s total goods trade due to high tariffs.
During her visit to India, von der Leyen expressed enthusiasm for progressing negotiations to lower trade barriers, particularly for European products like cars, spirits, and wines. Conversely, India is looking for increased EU investment in sectors like clean energy and urban infrastructure, as well as easier mobility for its skilled workforce.
Von der Leyen indicated a potential future Security and Defence Partnership with India, similar to those with Japan and South Korea, to tackle shared challenges such as terrorism, cyber-attacks, and maritime security threats. This partnership may enhance both nations’ capacities to counter global threats and strengthen defense mutual cooperation.
Additionally, both leaders discussed India’s ambitions to attract businesses relocating from China, highlighting tax incentives, streamlined investment processes, and infrastructure development as keys to establishing a resilient supply chain. Modi’s government faces the pressing challenge of job creation for a rapidly growing population.
While discussions aimed to cover various topics, including the war in Ukraine, the EU chief’s statement did not explicitly address this issue. India has maintained its traditional alliances, hence balancing its international relations amid pressures to take a firmer stance.
India and the EU are on track to finalize a comprehensive FTA by year-end, focusing on mutual benefits and economic collaboration. The agreement reflects India’s market potential and the EU’s interests in accessing it. With ongoing discussions about security cooperation and joint responses to global threats, the partnership is set to enhance stability and prosperity in the Asia-Pacific region.
Original Source: www.rfi.fr
