India's Commerce and Industry Minister, Piyush Goyal, has strongly criticized the European Union (EU) for imposing what he describes as "irrational standards" and "unfair rules" that hinder trade between India and the EU. His remarks come amidst ongoing negotiations for a Free Trade Agreement (FTA), which both parties aim to finalize by the end of 2025.
EU's Carbon Border Adjustment Mechanism (CBAM) and Deforestation Regulation
One of the primary points of contention is the EU's Carbon Border Adjustment Mechanism (CBAM), which proposes tariffs on imports of high-carbon goods such as steel, cement, and aluminum. The EU justifies this measure as part of its strategy to achieve net-zero greenhouse gas emissions by 2050. However, Goyal argues that CBAM is "unilateral and not helpful," viewing it as a trade barrier that violates the spirit of the 2015 Paris Climate Agreement.
Additionally, Goyal has expressed concerns over the EU's anti-deforestation regulation, which aims to restrict imports of products linked to deforestation. He contends that these measures are "irrational" and create unnecessary hurdles for Indian exporters.
Safeguard Measures on Steel Imports
Another issue raised by Goyal is the EU's extension of safeguard duties on certain steel imports until 2026. He describes these measures as "irrational" and warns that India may have to take retaliatory actions if they persist. Call for Outcome-Oriented FTA
Goyal emphasizes the need for an "outcome-oriented" and "meaningful" FTA, urging both parties to focus on trade and business issues while excluding extraneous matters. He stresses that India's dairy sector, for instance, should remain protected and not be subject to liberalization under the FTA.
Conclusion
As India and the EU strive to finalize their FTA, Goyal's criticisms highlight the challenges in aligning both parties' trade policies and standards. The outcome of these negotiations will significantly impact bilateral trade relations and economic cooperation between the two regions.