India to engage with four key economies over FTAs

The year 2023 is set to be extremely busy for Indian trade negotiators as they will engage four key economies on FTA while targeting to close a deal with the UK by the Holi festivities in March.

The year 2023 is set to be extremely busy for Indian trade negotiators as they will engage four key economies – the UK, the European Union (EU), Canada and the Gulf Cooperation Council (GCC) – on trade deals while targeting to close a deal with the UK by the Holi festivities in March, three people aware of developments said.

Though official timelines for the different negotiations are yet to be finalised, it is expected the trade deal with Australia will be operational in early 2023, and this may be followed by the conclusion of negotiations for a free trade agreement (FTA) with the UK, the people said requesting anonymity.

India finalised two deals this year– the India-UAE FTA signed on February 18 that officially entered into force on May 1, and the India-Australia Economic Cooperation and Trade Agreement (ECTA), which was inked on April 2 and was ratified by Australia’s Parliament on Tuesday.

“While the fifth round of talks with Canada were held last week, the third round of India-EU trade negotiation is scheduled to start on November 28. Besides, the terms of reference for a trade deal with GCC are currently being negotiated. India has been approached by many other countries, but we don’t have any spare capacity left to engage with them immediately,” one of the people said. The UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait members of GCC.

Commerce minister Piyush Goyal and GCC secretary general Nayef Falah M. Al-Hajraf met in New Delhi on Thursday, marking the launch of India-GCC free trade agreement negotiations, a government spokesperson said.

“Some definite outlines of the deals with the EU and Canada are expected in 2023 as they are keen to forge trade pacts expeditiously since India has emerged one of the most reliable global sourcing hubs for goods and services. Apart from that, it is one of the shining stars while most economies are slowing down due to global headwinds,”a second person said.

The third round of the India-EU trade negotiations will be held in India from November 28 to December 9. A total of 75 sessions on 19 policy areas are scheduled for this round. India’s negotiations with the EU were revived on June 17 after a gap of almost a decade and cover three agreements on trade, investment and geographical indicators.

The first round focused on discussing EU proposals for 18 chapters, and the second was devoted to detailed exchanges on Indian responses to the EU’s proposals and on Indian textual counterproposals. The EU tabled a draft chapter on trade and sustainable development, anti-fraud and mutual administrative assistance ahead of the second round. The Indian side was requested to provide detailed explanations and clarifications of its positions to prepare for the third round, when the negotiators “should be in a position to enter into actual negotiations”, a third person said.

Further exchanges of information on most chapters are expected ahead of the third round, the third person said. The second round facilitated better understanding of each side’s sensitivities on trade in goods and also identified differences on rules of origin. There were also “differences in positions” on technical barriers to trade and “significant divergences” on trade in services.

The first person said: “Although India-EU negotiations are progressing well, due to complexities such as there being 27 EU members and other issues, a definite timeline is still not clear.”

India and the EU have set a timeline of concluding negotiations by 2023, considered ambitious since the bloc’s other FTAs have usually taken several years. Enrique Mora, the EU deputy secretary general for political affairs who was in New Delhi this week for political consultations, acknowledged the complexities involved in the trade negotiations.

“We really want to go for that. India wants to go for it but it’s not easy because you’re a big country, a big economy…But what we were absolutely sure is that by the next [India-EU] summit next year, we should have something on [the trade deal],” Mora said.

As with Australia, trade with developed countries is always good for India, which is emerging as a global supply chain hub, the first person said. “There are some areas of concerns such as mobility, automobiles and whisky, particularly Scotch. But our industry understands it is give and take and ultimately it will expand their market.”

While India and the UK were unable to meet a Diwali deadline for concluding talks on a FTA, the two sides are hoping to bridge differences on market access, automobiles and mobility of professionals and students to finalise an agreement early next year. In this context, Holi is being seen as a possible timeframe for concluding a deal.

Confederation of Indian Alcoholic Beverage Companies (CIABC) director general Vinod Giri said: “The FTA with UK and EU under progress will, of course, affect the Indian alcoholic beverages industry, at least in the near term. But Indian industry is willing to embrace that risk in the larger interest of the economy and in the hope that the FTAs also open opportunities for Indian industry to compete in the global alco-bev trade.”

He added, “The world may want us as the buyer but we also aspire to be the world’s suppliers. We are the world’s largest producer of whiskey. Our malt whiskies like Rampur and Amrut or our craft gins like Jaisalmer are acclaimed all over the world. We too need market access. We want the FTAs to not just open our market but also the doors of the world to us.”

India has also held five rounds of trade talks with Canada. The fifth round of negotiations was held during November 14-18, where the intent was covering areas such as the environment, labour, gender and small and medium enterprises (SMEs). This was besides traditional matters under the Early Progress Trade Agreement (EPTA), which was relaunched in March. EPTA is the first milestone before a Comprehensive Economic Partnership Agreement (CEPA) between India and Canada.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp