EU deal goes beyond trade… can lift manufacturing: Piyush Goyal

Referring to the significant step-up in defence spending by European nations — pushed by a Washington reshaping the transatlantic alliance — Goyal said that this presented a major opportunity for India.

“We have entered into a strategic defence partnership… 800 billion Euros is their budget for the next five years,” he said, indicating the EU may look at outsourcing parts of it, which offers an opportunity for India. The EU ‘ReArm Europe’ initiative is a Euro 800 billion strategy to strengthen defence readiness by 2030.

On the contentious issue of Carbon Border Adjustment Mechanism (CBAM), Goyal said, “The carbon taxes we pay will be recognised over there. So that part can be offset. And more and more of our steel mills, for example, are becoming efficient now. In any case, their carbon footprint will be low. So we won’t be required to pay too much carbon tax.” CBAM is a duty or a tax that is imposed by Europe on goods produced in other countries by processes that lead to greater carbon emissions.

In addition to this, the EU is helping India in its decarbonisation efforts, the Commerce and Industry Minister said. “A joint fund of Euro 500 million has already been announced. This is just the beginning.”

In terms of automobiles, none of the small automobiles which are sold in India, which is about 90 per cent of the market, are impacted, Goyal said. “The cars (market) that we have opened and given a quota in a graded (manner) are in the luxury bracket,” he added.

Goyal said to take advantage of the opportunities that the FTA with the EU presents, Indian industry has to create capacities. “It (industry) has to ramp up production and ramp up quality,” he said. The minister said the government’s outreach to the industry on the opportunities presented by the multiple FTAs that India has signed includes not just the big industry associations, but also regional and local chambers. “Chambers in Mumbai, Chennai, Rajkot, Kolkata, among others are being addressed. There are many MSMEs which would be keen to know about how tariffs have come down in the sectors they operate in,” he said.

On the issue of government procurement, which has been kept out of the ambit of the EU deal despite being a feature in some of the other deals that India negotiated previously including the ones with the UK and the UAE, Goyal said there was a bit of wrangling on the issue. “I told the EU that, look, you want government procurement, you get me a commitment from all the 27 states that they’ll allow government procurement. They said, oh! That’s the competence of the European member states. I said, why do I give you my government procurement… Reciprocity is a principle of this government,” he said.

India, he said, is signing trade deals from a position of strength. “Because (an) FTA is about the future, not about the past. and we have only done deals with developed countries. Eight agreements, 37 countries, all developed countries,” he pointed out.