Resuming on Monday, 23rd September, the ninth round of free trade agreement (FTA) negotiations between India and the European Union (EU) is expected to focus on duty relief for Indian textile products in EU markets, according to two people with knowledge of the negotiations.
The individuals cited above stated that although India is pushing for labour-intensive textiles and apparel products to be included in the ongoing negotiations as non-tariff items, the EU places higher import duties on textile products, usually between 10 and 12 percent. This puts India at a disadvantage against China, which is the EU’s top supplier of textiles and apparel.
Eighth round of talks took place in June and included twenty-one policy areas and chapters, including services, pesticides, and the carbon price. The negotiators also touched on difficult topics including high tariffs and the EU’s strict safety regulations for pharmaceuticals and agricultural products.
Meanwhile, the second person mentioned above stated that both India and the EU will discuss a 12-point agenda when the ninth round of talks resumes. This agenda includes topics like deforestation, electric vehicles, sustainability, trade barriers, sanitary and phytosanitary (SPS) measures, textiles, trade of more goods and services, taxes on spirits and benefits for IT professionals.
“India aims to increase trade in electric vehicles (EVs) and is advocating for the relaxing of the Carbon Border Adjustment Mechanism for its Micro, Small, and Medium Enterprises (MSMEs). Further access for India’s services sector, tariff reductions, and bolstering investment protection are among the other key agenda items for the next negotiations, the second individual stated.
Since FY ’21, India’s exports to Europe have increased in lockstep with the world economy’s recovery from the pandemic. Value-wise, India’s exports to Europe increased to US $ 98.88 billion in FY ’24 from US $ 98.34 billion the year before, while imports increased to US $ 95.77 billion from US $ 90.99 billion in FY ’23.
Data compiled by the Confederation of Indian Textile Industry (CITI) shows that India’s garment exports saw a strong gain of 11.85 per cent in July, driven by strong demand in the US and European markets.
While textile exports remained stable at US $ 1,660.36 million in July compared to US $ 1,663.06 million, apparel exports surged to US $ 1,277.20 million in July of this year from US $ 1,141.95 million in the same month previous year.
