The European Union and India on Friday relaunched negotiations to forge a free trade agreement, with the aim of completing talks by the end of 2023.
“This partnership will become a defining moment for world trade in the 21st century,” Indian Commerce Minister Piyush Goyal told a news conference.
The two sides previously launched talks in 2007, but they were frozen in 2013 due to lack of progress. EU and Indian leaders agreed in May 2021 to resume negotiations.
EU Trade Commissioner Valdis Dombrovskis said the free trade agreement would cover “essentially all trade,” in line with World Trade Organization standards, including sectors such as automotives and spirits.
“For the European Union, the partnership with India is one of the most important relationships for the upcoming decade”, Dombrovskis said.
The next round of negotiations is scheduled to take place in New Delhi from June 27 to July 1.
The two sides will also hold separate discussions to create agreements to protect investment and region-specific agri-food product names such as champagne or feta cheese, known as geographical indications.
For the European Union, a free trade agreement with India would fit its strategy of increasing its engagement with the Indo-Pacific region, where the bloc is targeting bilateral deals to take advantage of expected higher economic growth.
A deal with India could act as a counter-balance to China’s growing influence in the region. The EU is also aware that former EU member Britain is also pushing for a trade accord with India.
During the talks the EU will likely push for lower tariffs to gain greater access to Indian markets for its cars, alcoholic drinks and agri-food products such as cheese.
India is seen benefiting more in services and would like easier visa access to the EU for Indian professionals.
For the EU, any deal would also have to include sustainable development objectives, such as on the environment and labor.
The bloc is India’s third largest trading partner, while for the EU India ranks 10th.