India, EU may finalise interim FTA by July

NEW DELHI: After the UK, India is now looking to close an "early harvest" trade agreement with the European Union as soon as July with both sides looking to push exports amid the uncertainty caused by Donald Trump's moves on tariffs.

Negotiators from both sides are working overtime to finalise the trade pact - which has been in the pipeline for close to two decades - with a team led by India's chief negotiator Satya Srinivas returning to Brussels this week.

Govt is expected to offer tariff concessions similar to the ones it has agreed to with the UK, including reducing the levy on automobiles to as low as 10%, while slashing duties on wines, certain types of meat and poultry. In return, it would want the trading bloc to offer easier access to Indian garments, pharmaceuticals, steel and oil products.

The interim agreement will not be limited to tariffs and may also include issues such as intellectual property rights (IPRs), govt procurement, and non-tariff barriers, a senior official said. A few years ago, India had entered into an interim pact with Australia, although it had worked out a comprehensive free trade agreement with the UK.

Sources indicated that the proposed pact with Oman, which is stuck mainly on the issue of petrochemicals, may also be finalised soon as govt broadens its trade engagement to push exports, both of goods and services.

India and EU have agreed to conclude the agreement in two phases on account of the uncertain global trade environment, sources said.

In recent months, the talks have received a fillip, thanks to the signals coming from the highest levels. EU too is seen to be more accommodative of India's position on several counts, something it was unwilling to do earlier.