EU eyes tariff cuts on cars, alcohol exports to India
26 Feb 2025

The European Union (EU) is reportedly pushing for lower tariffs on important exports like whiskey, wine, and cars.

This demand constitutes a major part of the ongoing Free Trade Agreement (FTA) negotiations with India.

The matter will be a key agenda during the upcoming visit of the EU's College of Commissioners, led by European Commission President Ursula von der Leyen to India on February 27-28, according to The Indian Express.

EU-India trade talks: Aiming for comprehensive pact
Trade negotiations

The EU is pushing for a comprehensive and commercially meaningful trade pact covering tariffs, non-tariff barriers, as well as procurement commitments.

This demand follows nine rounds of FTA talks, with the 10th round set for March 10-14 in Brussels.

An EU official has pointed out India's relatively closed market on important commercial products as a roadblock in these negotiations.

Potential benefits of EU-India FTA
Market expansion

If finalized, the EU-India FTA would be India's most extensive such agreement, improving market access for labor-intensive sectors such as textiles, leather, as well as marine products to the EU.

The EU is India's second-biggest export market after the US.

On its part, India is pushing for concessions for its MSMEs and greater integration with the EU's services sector.

India's concerns and aspirations in EU trade deal
Trade challenges

India is especially worried about the EU's Carbon Border Adjustment Mechanism (CBAM) which may levy higher duties on Indian steel and aluminum products.

The country is also pushing for more opportunities for skilled labor mobility.

As of now, Indian textile exports attract an additional 10% duty as opposed to rivals like Bangladesh and Vietnam due to the absence of an FTA, a scenario an agreement with the EU could fix.