“While both sides are negotiating tariffs, the question is now how to manage non-advocacy barriers. Both sides have attracted attention,” said one person who knew the development.
India has said that if the EU taxes Indian goods, it will impose a duty of retaliation. The EU’s CBAM is expected to impose it as a 20-35% tax on the EU starting January 1, 2026 and will affect the cement, iron and steel, aluminum, fertilizer, electricity and hydrogen sectors.
This is of great significance as India will have the right to retaliate against its industry or seek compensation in order to lose from CBAM under the recently concluded free trade agreement.
EUDR attempts to prevent imports of specific commodities, causing deforestation and forest degradation. It is covered with coffee, leather, oil cakes, wooden furniture, paper and cardboard.
The 2024-25 economic survey said that EU CBAM and EUDR are expected to affect India’s $9.5 billion exports to the EU, accounting for 9% of India’s exports to the world, or 12.9% of India’s exports to the group.
“India will be the fourth largest economy, but not the fourth largest recipient of FDI. There are also some concerns in this regard,” the person said.
Brussels also ruled out visa issues within the scope of the Trade Agreement’s authority.
India – The EU FTA will end at the end of this year. Separate negotiations on the Investment Protection Agreement and a geographic sign agreement for June 2022 are also underway.
