Key Discussions in India-EU Trade Talks
The ongoing trade talks between India and the European Union (EU) focus on several critical areas that impact bilateral trade and regulatory compliance.
G7 Traceability Requirements on Diamonds
- Discussions on traceability requirements for diamonds sourced from Russia are crucial.
- The EU has extended the deadline for complying with these requirements to January 1, 2026.
- India may seek concessions, as compliance could impact its diamond trade.
Carbon Border Adjustment Mechanism (CBAM)
- CBAM poses challenges for Indian exports, particularly steel and aluminum.
- India is seeking protective language in the Free Trade Agreement (FTA) to address CBAM-related tariffs.
India's Strategic Interests
- India aims to be recognized as a data-secure nation to facilitate digital trade.
- Seeks easier temporary work access for skilled professionals to the EU.
- Wants to resolve issues related to the EU's new trade regulations, such as the Deforestation Act.
EU's Expectations
- Pushing for lower tariffs on cars and alcoholic beverages in India.
Recent Developments
- India-EU FTA negotiations restarted in June 2022 after a nine-year pause.
- Investment Protection Agreement and Geographical Indications Agreement negotiations began simultaneously.
- Next round of negotiations scheduled for March 10-14 in Brussels, focusing on rules of origin and government procurement.
Global Context
- US President Trump's recent tariffs on EU goods add complexity to the trade dynamics.
- India and the US commenced bilateral trade talks, aiming to finalize the first tranche by autumn.
Expert Opinions
- EU must acknowledge India as a data-secure country.
- Protective measures against CBAM are necessary to align with World Trade Organization rules.