India-EU trade deal could take over a year to effect
What's the story
The proposed free trade agreement (FTA) between India and the European Union (EU) could take at least a year to come into effect after its signing, according to Moneycontrol. This is due to the lengthy ratification processes in the 27-nation bloc. The two sides are hoping to conclude talks for this trade deal by the end of this year.
Delay details
Ratification process in EU countries
A government official told Moneycontrol that the ratification process could take longer as some EU countries have their own individual processes. An industry source echoed this sentiment, saying it could take more than a year for exporters to benefit from lower tariffs due to the need for individual country ratifications.
Negotiation updates
Next round of talks scheduled for October
India and the EU held the 13th round of talks for the proposed trade deal from September 8 to 12, with significant convergence achieved in many areas. The next round is scheduled to take place in Brussels from October 6 to 10, as both sides are keen on concluding negotiations at the earliest.
Ratification procedure
How EU negotiates trade deals
Trade deals with the EU are negotiated by the European Commission after getting approval from the Council of the EU. Once negotiations are done, the commission publishes and presents it to both the council and the European Parliament for approval. If both approve, then only can an agreement be concluded. However, if it involves areas under member states' jurisdiction, full conclusion awaits their ratification/signature too.
Application details
Between signing and ratifying a deal
Between signing and ratifying a deal, parts of it can be "provisionally applied" if the council chooses to do so. This usually takes effect once the European Parliament gives its go-ahead. For instance, the EU's FTA with New Zealand was signed on July 9, 2023, after talks ended on June 30, 2022. The deal was approved by both parties in November 2023 and ratified by New Zealand in March 2024 before coming into effect in May that year.
Trade dynamics
India-EU trade ties
The ratification timeline of the proposed trade deal between India and the EU is crucial, as both sides are looking to fast-track talks amid ongoing global trade disruptions. The EU is India's largest trading partner, accounting for 12.2% of its trade, ahead of the US (10.8%) and China (10.5%). For the EU, India ranks ninth in terms of trading partners with a share of 2.2% in goods trade this year.