Union Minister Piyush Goyal said on Friday that India would not be able to strike a free trade agreement deal with the European Union if the bloc kept insisting on seeking access to India’s dairy industry.
A report by Reuters quoted Goyal as saying, “A trade deal could be concluded swiftly if sensitivities were respected on both sides.” He made the comments at the Asia-Pacific conference of German business in New Delhi which was attended by the German economic minister Robert Habeck.
Meanwhile, Habeck said that the FTA is in limbo because of discussions on agriculture that remain the “most problematic” in the deal talks between the two sides. The German minister suggested that it would be better for the two sides to focus first on the industrial sector.
Agriculture is a problematic area as there is a huge variation in the number of people working in the farm sector in India and Germany, he told reporters, adding that it was 2 per cent of the population in Germany compared to about 60 per cent in India.
“So you can’t compare the two agricultural systems. If you were to open the markets completely … the disruption to the Indian market will be tremendous,” Habeck said.
When did FTA talks resume between India and EU?
India and EU agreed to resume the FTA talks in July 2022. The most recent round of discussion took place in September when officials from the 27-member bloc came to New Delhi.
During the ninth round of talks, both sides discussed core trade issues covering goods, services, investment and government procurement along with necessary rules such as rules of origin, SPS (sanitary and phytosanitary), and technical barriers to trade.
Scholz in India
Meanwhile, German Chancellor Olaf Scholz is in India and discussions on FTA are on the cards.
With Germany being India’s largest trading partner within the European Union, talks on the free trade agreement are expected to take centre stage. The country has also been one of the strongest advocates for the India-EU FTA.
According to a report by Financial Express, Jürgen Ratzinger, Managing Director of International Business at the Frankfurt Chamber of Commerce and Industry said, ““The business community is strongly favouring the India-EU trade agreement. India is an important trading partner and the potential is huge. We want to tap into that growth story from India.”
In 2023-24, trade between India and Germany amounted to $26.48 billion. However, the completion of a Free Trade Agreement (FTA) with the European Union could substantially enhance trade relations by eliminating barriers and streamlining regulations, particularly benefiting small and medium-sized enterprises (SMEs).
