As Europe faces food and energy crises amid the Russia-Ukraine war, negotiations for a revision in the 2007 free trade agreement (FTA) of the European Union with India can achieve what appeared impossible 9 years ago in the year of the 60th anniversary of bilateral relations. The FTA talks were suspended in 2013. In a post on the Europe Asia Foundation, Kathleen Van Brempt, a member of the European Parliament, has claimed that the present talks between India and the EU would be fruitful.
The EU should strengthen its ties with India for a variety of reasons, Brempt said. India is the largest democracy in the world and a significant ally. It is near to both China and Russia and is geographically in the middle of the crucial Indo-Pacific area from a strategic standpoint. India's geopolitical importance cannot be overstated, according to Brempt's article.
It is a win-win proposition according to Brempt. There are about 6,000 European businesses in India. Through a variety of industries, these enterprises provide 1.7 million direct jobs and 5 million indirect jobs, the European MP said.
India, the fastest-growing emerging economy, is a sizeable and active market. The International Monetary Fund (IMF) says India's projected yearly GDP growth rate is over 8%. India is the tenth-largest commercial partner of the EU in terms of trade. India's third-largest commercial partner is the EU, Brempt notes.
The globe is currently experiencing both energy and food crises. Climate change is staring on the face. All these problems make it much more important and critical for relations between the EU and India to be strengthened, Brempt wrote.
Since 2005, India and the EU have been strategic allies. The Covid-19 epidemic has presented many difficulties. It caused supply chains to further expand and diversify. The war in eastern Europe is, Brempt observed, also causing changes in the global order of things.
In June 2022, India and the EU began implementing an Investment Protection Agreement and a Geographical Indications Agreement. It is a sign of rekindled political zeal on both sides to advance political and business ties. According to Brempt, both of these actions should be commended, according to the Europe Asia Foundation.
The value chains of European corporations still have a lot of untapped potential for India, according to MEP Brempt. Both sides have different expectations on market access.
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India currently imposes tariffs of 60–100% on important exports to the EU, including wine and autos. To increase market access, the EU will push for lower tariffs. As part of its goal to establish itself as a global industrial centre and a regional power, India wants to develop closer commercial ties with the EU.