India and the EU are pushing forward with negotiations for a comprehensive free trade agreement (FTA), aiming for a balanced deal that addresses mutual sensitivities and unlocks significant economic benefits. Recent talks highlighted progress, but key issues remain, underscoring the need for political will to achieve a commercially meaningful agreement.
India’s Commerce Minister Piyush Goyal revealed that the EU has proposed India create its own carbon tax mechanism instead of paying into the EU’s Carbon Border Adjustment Mechanism (CBAM). The CBAM, which is a tariff on carbon-intensive imports like steel and cement, is set to come into effect in 2026. While India considers the EU’s suggestion, Goyal expressed concerns that the CBAM could negatively impact the EU’s economy. He also clarified that the government has not reconsidered its stance on supporting Chinese investments in India, despite the Economic Survey suggesting leveraging the China-plus-one strategy for exports.
Maldives President Mohamed Muizzu expressed gratitude to India for its financial support in easing the island nation’s debt repayment, while also seeking to strengthen ties and potentially sign a free trade agreement. He commended India’s role as the Maldives’ closest ally and highlighted ongoing negotiations for currency swap agreements with both India and China.
India is seeking significant duty cuts on a wide range of exports to South Korea as it reviews its free trade agreement with the country. The Indian government wants tariffs reduced on agricultural products, textiles, pharmaceuticals, electronics, and petrochemicals, while South Korea has requested improved mobility for its professionals. Negotiations are ongoing in Seoul, with India also demanding greater market access for products like steel, rice, and shrimp. This review aims to address the growing trade deficit India faces with South Korea, with Indian exporters facing challenges in penetrating the Korean market due to non-tariff barriers and import quotas.
India’s Commerce and Industry Minister Piyush Goyal held talks with his counterparts from the EU and UK on the sidelines of the G7 Trade Ministers meeting in Italy, focusing on deeper economic ties and free trade agreements. Discussions also centered on strengthening global supply chains, with Goyal advocating for collaboration among trusted partners and public-private partnerships in critical areas like critical minerals, semiconductors, and green energy.
Indian Prime Minister Narendra Modi congratulated UK’s new Prime Minister Keir Starmer on his victory and extended an invitation for an early visit to India. Both leaders discussed deepening the India-UK Comprehensive Strategic Partnership and agreed to work towards a free trade agreement.
Talks are underway between Thailand and the European Union (EU) for a free trade agreement that could reshape bilateral trade and boost economic cooperation. This potential agreement would cover areas such as business, services, and supply chains, with bilateral trade reportedly reaching nearly one billion euros on a weekly basis. The proposed agreement could also include comprehensive measures covering intellectual property, government procurement, and e-commerce.
The next round of talks for a free trade agreement (FTA) between India and the 10-nation Association of Southeast Asian Nations (ASEAN) is scheduled for July in Jakarta, Indonesia. The review will focus on the ASEAN Trade in Goods Agreement (ATIGA), aiming to expand trade in goods and services and reduce non-tariff barriers. India’s trade with ASEAN has declined by 5.74% in the current financial year. The review aligns with India’s Look East policy and is expected to strengthen trade and investment ties between the two regions.
Pakistan and Iran have reaffirmed the importance of energy cooperation and electricity trade despite potential US sanctions. During Iranian President Ebrahim Raisi’s visit to Pakistan, the two countries agreed to expedite a free trade agreement and boost bilateral trade to $10 billion over five years. They also emphasized collaboration on combating terrorism, narcotics smuggling, and other threats. The joint statement comes after US warnings about sanctions risks, highlighting the delicate balance in regional relations.
