New Delhi, October 26, 2024: Union Minister Piyush Goyal warned that India’s Free Trade Agreement (FTA) negotiations with the European Union (EU) could falter if the EU insists on India opening its dairy sector. Speaking at the 18th Asia-Pacific Conference of German Business in New Delhi, Goyal said that for an FTA to proceed, both sides must respect each other’s economic sensitivities.
During his address, Goyal spoke about the substantial benefits that both India and the EU could harness from a strategic alliance. He said that India’s massive market consists of 1.4 billion people, many of whom are young and aspirational. “India can offer a very large market… I believe a deeper engagement, possibly an FTA, will benefit both sides,” he stated. The minister suggested that while the EU possesses advanced technologies and innovations, India offers a large, dynamic market with a lower cost structure, creating an ideal match for bilateral trade.
The minister also outlined three core principles needed for successful FTA negotiations: mutual respect for each other’s economic conditions, sensitivity to disparities in per capita income, and support for India’s transition to a USD 60,000 per capita economy. He added that these factors were respected in recent FTAs with Australia and the UAE, enabling swift agreements according to the reports published in businessworld.in.
The Asia-Pacific region is home to 60 per cent of the world’s population and two-thirds of the global middle class, creating vast opportunities for trade and investment.
Germany’s Federal Minister of Economic Affairs and Climate Action, Robert Habeck, said that the partnership is crucial in the Indo-Pacific, as the region is projected to contribute to half of the global GDP by 2050. According to Habeck, Germany considers the Indo-Pacific as central to its global trade strategy, adding that the timing of the conference could not be more relevant due to the evolving global landscape and rising protectionist sentiments.
The world is rapidly changing, sometimes unpredictably, but Germany sees a promising future in close cooperation with India and other Indo-Pacific countries, Habeck added.
In June 2022, the EU relaunched negotiations with India for a Free Trade Agreement and launched separate negotiations for an Investment Protection Agreement and an Agreement on Geographical Indications (GIs).
The EU is India’s third largest trading partner, accounting for USD 95 billion worth of trade in goods in 2021 or 10.8 per cent of total Indian trade. India is the EU’s 10th largest trading partner, accounting for 2.1 per cent of EU total trade in goods. Trade in services between the EU and India reached around USD 33 billion in 2020.
Germany has been India’s largest trading partner in Europe. It has consistently been among India’s top ten global partners and was the seventh-largest trading partner in FY 2020-21.
