*** EU-India Push for Historic Free Trade Deal Amid Global Trade Tensions | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

EU-India Push for Historic Free Trade Deal Amid Global Trade Tensions

TDT | Manama

Email: mail@newsofbahrain.com

New Delhi: European Commission President Ursula von der Leyen has reaffirmed the European Union's commitment to securing a Free Trade Agreement (FTA) with India by the end of this year, despite acknowledging the challenges ahead.

"I am well aware it will not be easy. But I also know that timing and determination count," von der Leyen said during her visit to Delhi. She emphasized that such a deal would mark the largest trade agreement of its kind anywhere in the world.

Accompanied by the entire College of Commissioners, von der Leyen's visit to India is the first such engagement following the European parliamentary elections in June 2024. She met with Indian Prime Minister Narendra Modi on Friday to discuss strengthening economic ties and enhancing cooperation across multiple sectors.

Expanding Trade and Investment

The European Commission chief highlighted that both sides are keen to deepen collaboration in key industries, including semiconductors, artificial intelligence, and cleantech. India and the EU revived talks on a long-pending free trade agreement in 2021, and another round of negotiations is scheduled for March. The discussions are expected to gain further momentum at the India-EU Summit later this year.

Despite progress, experts note that negotiations have been slow due to differences in areas such as agriculture and manufacturing. "The two sides have little to show for the talks thus far," India-based think tank Observer Research Foundation (ORF) stated in a recent report. However, economic ties remain strong, with approximately 6,000 EU companies operating in India. The EU is India's largest trading partner in goods, with bilateral trade reaching $135 billion in 2022-23, nearly doubling over the past decade.

Security and Defence Cooperation

Beyond trade, von der Leyen also announced that India and the EU were working towards a Security and Defence Partnership, similar to the existing arrangements with Japan and South Korea. Brussels is eager to strengthen its foothold in the Indo-Pacific as geopolitical tensions rise, particularly with the U.S. following Donald Trump’s return to the White House.

Trump has vowed to impose 25% tariffs on European goods, claiming the EU was established to "screw the US." The European Union has warned of immediate countermeasures against any such trade restrictions.

Given these global shifts, analysts argue that a robust trade and security partnership with India is now more crucial than ever for the EU.

India’s Expanding Free Trade Agreements

India has increasingly embraced free trade deals in recent years. The country recently restarted FTA negotiations with the UK, nearly a year after talks were paused ahead of general elections in both countries. Last year, India successfully concluded a $100 billion trade agreement with the European Free Trade Association (EFTA), a bloc of four non-EU European nations, after nearly 16 years of negotiations.

As the India-EU FTA talks continue, both sides remain optimistic about overcoming obstacles and forging a landmark trade agreement that could redefine economic relations between the two regions.