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India-EU Free Trade Agreement

UPSC CURRENT AFFAIRS | NEGOTIATIONS FOR INDIA-EU FREE TRADE AGREEMENT | 25TH JUNE | LIVEMINT

/ June, 2022, UPSC Daily Current Affairs

SYLLABUS SECTION: GS III (ECONOMY)

WHY IN THE NEWS?

In a joint event held at the Headquarters of the European Union (EU) at Brussels, both the countries re-launched the India-EU Free Trade Agreement (FTA) negotiations.

  • Besides, negotiations were also launch for a stand-alone Investment Protection Agreement (IPA) and a Geographical Indicators (GIs) Agreement.
  • IPA would provide a legal framework for cross-border investments to enhance the confidence of investors,
  • While GI pact is expect to establish a transparent and predictable regulatory environment,
  • They are about to facilitate trade of GI products including handicrafts and agri-commodities.

Background

  • Last year, an agreement was reach for resuming negotiations for a balanc, ambitious,
  • Comprehensive and mutually beneficial FTA and starting fresh negotiations on the IPA and a separate agreement on GIs.
  • Both the countries are now resuming the FTA talks after a gap of about nine years since the earlier negotiations were left off in 2013 due to difference in the scope and expectations from the deal.

Significance

  • This would be one of the most significant FTAs for  India-EU Free Trade Agreement is its second largest trading partner after the US.
  • The India-EU merchandise trade has register an all-time high value of USD 116.36 Billion in 2021-22 with a year-on growth of 43.5%. India’s export to the EU jumped 57% in FY 2021-22 to $65 billion. India has a surplus trade with EU.
Other FTAs
  • India earlier this year has conclude FTAs with Australia and the UAE in a record time.
  • The FTA talks with Canada and the UK are also underway.
What is FTA?
  • A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

SOURCE: LIVEMINT