After concluding the UK free trade agreement, the Indian government has moved fast on another trade deal—with the European Union, a bloc that accounts for 17 percent of global GDP and 15 percent of global trade. In their recent joint communication, both sides committed to concluding the negotiations by the end of 2025. India and the EU are spurred by the US’s tariff tantrums to expedite the deal and cushion each other from the fallout. However, trading with Europe is not the easiest of tasks, given its stringent phytosanitary rules, and environmental and sustainability clauses. In the communiqué, the EU obliquely raised concerns over India’s imports of Russian oil and defence goods. The framework, besides covering the usual issues of market access, also lays down ‘robust sustainable development provisions’. These cover a wide array of issues including labour standards, gender equality, environment, and biodiversity protection.
Trade talks are no longer only about tariffs and the movement of goods and services. They cover other aspects of business, investment and even governance, and are backed by World Trade Organization norms. Issues such as gender, environment, labour, and data protection often become a drag on the negotiations. The India-EU talks, which resumed in 2022 after initial attempts in 2007, cover 24 chapters including sustainable food systems, transparency, and good regulatory practices. Some of these chapters are worded in a manner that projects a big-brotherly approach. The developed world has often criticised India for its hard stance on tariffs and some measures of protectionism. It is equally true that the EU has used non-tariff barriers such as standards and norms to limit access for Indian goods.
At the same time, as against the abrasive and unreasonable demands being made by the Trump administration, the EU is a potentially stable partner and lucrative market that India needs to pursue. Therefore, the deadline for concluding the deal must be adhered to. However, India should remain wary of accepting conditions that undermine its own policy prerogatives, cultural ethos, and sovereignty. Perhaps it is too early to learn from the recently-concluded deal with the UK, in which some earlier-held positions on non-trade issues such as gender and labour were given up. Such changes may well be needed—but they are better formulated in Delhi, not Brussels.