Piyush Goyal: Trade Talks with EU Focus on Tariff, Non-Tariff Barriers

Commerce Minister Piyush Goyal, on his May 1 visit to Brussels, stressed that the ongoing discussions for the proposed India-European Union (EU) trade agreement are paying equal significance to both tariff and non-tariff barriers, along with consideration of the sensitive nature of some sectors for both economies.

After a meeting with the European Commission's Commissioner for Trade and Economic Security, Maros Sefcovic, Goyal again reiterated India's intent to complete negotiations for a Free Trade Agreement (FTA) with the EU by the end of 2025.

“We are both equally concerned to make the market access meaningful for both countries while respecting the sensitivities that our business or our economies may have in certain sectors. The agreement once concluded will certainly be a transformative pillar of the deep partnership between India and EU, enhancing market access, aligning our regulatory practices and boosting innovation and competitiveness,” said Goyal.

The minister further pointed out that the talks emphasized the central position of mobility and investment in bringing economic dynamism into the India-EU trade relationship. He further added that both parties have come to a mutual understanding on outlining a framework for bolstering growth for both economies.

“We stand committed to resolving the pending issues along with our teams in the spirit of mutual respect and pragmatism so that [the deal] is outcome-oriented and commercially meaningful on both sides,” Goyal stated in a joint virtual briefing with Sefcovic.

Though the negotiations have been going forward step by step, some highly controversial issues remain outstanding. An area of keen interest for India is the Carbon Border Adjustment Mechanism (CBAM) policy of the EU, a carbon tax proposal enacted in 2023 that is scheduled to become operational starting from January 2026. The mechanism looks to impose a charge on importations of carbon-intensive products like steel, cement, and aluminum by the EU's aim to become carbon-neutral by the year 2050.

Goyal has repeatedly raised concerns over the EU's carbon tax rules and deforestation-related initiatives, warning that these measures could significantly raise the cost of Indian exports.

Meanwhile, Sefcovic expressed optimism about the ongoing negotiations, stating that the talks are on the “right track” and that both sides are making “solid headway” toward a balanced and mutually beneficial agreement.

“In today’s climate of global uncertainty, businesses are looking for opportunity, access and predictability, and that we (India and the EU) are working on together to deliver… our teams are staying in touch to keep this momentum going because our shared ambition is clear. So, let’s get this deal done by the end of this year,” Sefcovic said.