Deal with EU to be implemented in 2026 itself: Piyush Goyal, Pg1

Key Highlights:

• The India-European Union (EU) Free Trade Agreement (FTA) is expected to be implemented in 2026.
• Piyush Goyal, the Commerce and Industry Minister, highlighted the strong commitment from both sides to expedite the agreement.
• Artificial Intelligence (AI) may be used to translate the agreement into 24 European languages to accelerate approvals.
• The FTA aims to boost India's labor-intensive sectors, potentially increasing exports by $35 billion.

Detailed Insights:

• The EU-India FTA engagement started in 2021, with negotiations beginning in mid-2022, driven by India's goal to become a developed nation by 2047 through global engagement.
• The agreement includes provisions addressing the Carbon Border Adjustment Mechanism (CBAM), reflecting mutual trust and accommodation between India and the EU.
• The FTA prioritizes pragmatic gains by focusing on easily achievable aspects and setting aside contentious issues like sensitive agricultural products.
• India aims to diversify its trade relationships and reduce reliance on specific markets, as seen in the strategic approach to the EU FTA.
• The agreement is expected to provide Indian exporters with competitive advantages similar to those enjoyed by Bangladesh and Vietnam in the EU market due to preferential duties.
• The government is confident that the FTA will boost exports in labor-intensive sectors, creating jobs and stimulating economic growth.
• India's previous experience with the Regional Comprehensive Economic Partnership (RCEP) has shaped its current approach to trade agreements, focusing on deals with developed nations.

Key Concepts Involved:

• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate trade barriers, such as tariffs and quotas, to encourage trade and economic cooperation.
• Carbon Border Adjustment Mechanism (CBAM): A trade policy tool designed to address carbon leakage by imposing a carbon tax on imports from countries with less stringent climate policies.
• Regional Comprehensive Economic Partnership (RCEP): A free trade agreement among the Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.