India-EU FTA: Sensitivities in agri-dairy accepted; Auto, liquor, visas yet to be settled

NEW DELHI : The EU has “more or less” accepted India’s sensitivities in agriculture and dairy in the ongoing negotiations for a Free Trade Agreement (FTA). However, the two sides are yet to finalise commitments in crucial goods, including automobiles and liquor, and settle issues related to non-tariff measures and some final aspects of services.

The two have agreed to seal the FTA as soon as possible, targeting the year-end, even if negotiations on the pacts on investments (BIT) and Geographic Indications (GIs), simultaneously taking place, lag behind.

Tariff talks
“The EU is looking for a steeper reduction in import duties on automobiles, including EVs, as well as alcoholic beverages, than what India is willing to offer. While India made ambitious commitments under the UK FTA for automobiles, agreeing to a quota-based phased reduction of duties from 110 per cent to 10 per cent, and also for whisky, the market size is much larger in the EU and the same template may not apply,” a source tracking the matter told businessline.

The next negotiating round for the India-EU FTA is scheduled in Brussels from October 6-10.

On sensitive agricultural and dairy items, India is maintaining a consistent stand. “We cannot cross our red lines. That message is clear from our side. The EU understands as they also have their redlines,” he said.

India is also continuing to push for better commitments related to the movement of workers and visa issuance. “We are looking at the best offers that the EU has made to other countries,” the source said.

Negotiations are also on for tempering down of the EU’s non-tariff measures, such as harsh sanitary & phytosanitary requirements affecting India’s farm sector exports and a long-drawn registration process for pharmaceuticals.

IT concern
Unfortunately for the Indian IT sector, unlike the India-UK FTA, the pact with the EU is not likely to include a social security agreement. Instead, the country will continue to work individually with EU members for bilateral pacts in the area, the source added.