India and the European Union (EU) are accelerating efforts to finalise a long-pending trade agreement within the next three months, according to a report by OneWorldOutlook. The push comes amid heightened global trade tensions, especially due to the aggressive tariff stance taken by the United States under President Donald Trump.
The deal aims to address key issues such as agriculture, market access, and economic stability. While the EU views the agreement as a shield against global market volatility, India sees it as a strategic assertion of its growing economic strength.
For India, this deal is not a reaction to global pressures but a proactive move that reflects its confidence as a rising economic power. The agreement is expected to help shape future global trade frameworks, signaling a shift from merely adapting to rules to actively shaping them.
Europe’s need to reduce reliance on China and Russia has made India a preferred partner in its diversification strategy. India’s expanding manufacturing sector, robust digital economy, and large consumer base offer European companies a viable alternative to China.
However, differences remain. India has raised strong objections to the EU’s Carbon Border Adjustment Mechanism (CBAM), particularly its binding sustainability clauses. Commerce Minister Piyush Goyal criticized the mechanism for penalizing developing countries for emissions they didn’t cause.
If concluded, the India-EU trade agreement would mark a significant turning point in global trade dynamics. It would not only deepen economic ties between two major markets but also reinforce India's role as a key player in international trade negotiations. The deal would come after over a decade of talks and reforms, potentially reshaping the global business environment.
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