Week after UK deal, EU and India wrap up IPR, talks on carbon tax left

India has given market access to several product categories in which the EU and the UK are competitors, particularly spirits, medical equipment, and cars. An early deal with India has already given the UK a first-mover advantage in the Indian market.

Progress on goods trade

The EU report on the 11th round of talks between the two sides said that “good progress” was made in the trade in goods chapter and that the chapters on transparency, good regulatory practices, customs and trade facilitation, IPR, as well as mutual administrative assistance provisions, were closed. There are a total of 23 chapters being covered in the India-EU talks, out of which five have been wrapped up.

While both sides made headway in tariff discussions on industrial products – with India and the EU “signalling their positions for industrial products” – talks on the agri-food sector continued “with the aim to enhance the level of clarity about both sides’ positions,” the report said.

Negotiations on goods assume significance as an EU official had said that the trade deal with India hinges on Delhi’s commitment to lowering duties on cars, amid an ongoing crisis in the European automobile sector. Moreover, the EU is seeking better access to India’s wine and spirits market, in line with the access already granted to the UK.

CBAM negotiations remain

However, the report on the ‘Energy and Raw Materials’ chapter said: “It had been agreed ahead of the round that discussions would be put aside for the time being.” Negotiations on this chapter are significant as India’s metal exports to the EU continue to face restrictions. Official data for April to June showed that the EU slashed India’s quota for hot-rolled coil (HRC) by 23.7 per cent, sharply restricting access for a key export item.

Data showed that steel and aluminium shipments to the EU dropped by 24.4 per cent – from $7.71 billion to $5.82 billion in FY25 compared to the previous financial year.

“If these issues are not squarely addressed in the FTA, Indian exporters will continue to face steep EU barriers, while EU goods could enjoy zero tariffs into India. India missed the opportunity to rectify this imbalance in the UK FTA; it cannot afford to make the same mistake with the EU. A fair FTA must remove discriminatory quotas, secure CBAM (carbon border adjustment mechanism) carve-outs or compensation, and preserve India’s policy space to grow its industrial base,” said Ajay Srivastava, former trade official and founder of the Global Trade Research Initiative (GTRI).

Srivastava said that unlike the US – its recent 50 per cent steel and aluminium tariffs are harsh but clearly defined – the EU’s trade barriers are complex and opaque. Under the EU’s safeguard measures, Indian steel faces a strict country-specific tariff-rate quota (TRQ) system – where volumes beyond a narrow quarterly quota attract a 25 per cent out-of-quota duty, he said.

On services and investment, the report said that negotiators discussed and made “substantial progress” in agreeing on the services text, as well as planning for an initial exchange of offers on services. Detailed text-based discussions were held on the liberalisation of investment in areas beyond services, the report said.

Substantive progress on digital trade

Negotiators also made substantive progress on digital trade, particularly on digital trade facilitation provisions such as e-invoicing, e-authentication, e-contracts, paperless trade, online consumer protection, spam, digital identities and open government data.

The digital trade chapter in trade negotiations typically addresses rules and commitments related to online commerce and the cross-border flow of data and digital services. This part of the negotiations addresses ‘cross-border data flows’, where trade partners decide on commitments to allow the free flow of data across borders – crucial for e-commerce and global services.