Brussels (Brussels Morning Newspaper) – The European Union prepares to urge India to reduce its high tariffs on cars and wine to promote trade, a senior official from the EU said, Reuters reported.
Following U.S. President Donald Trump’s threat of reciprocal tariffs, the official stated the EU would push India to slash tariffs on some goods and widen market access for its products while showing flexibility on agriculture matters to expedite free trade agreement discussions.
The official further said,
“The Indian market is relatively closed, especially to key products of commercial interest to the European Union and our member states’ industries, including cars, wines and spirits.”
European Commission President Ursula von der Leyen will meet Indian Prime Minister Narendra Modi. It was preceded by meetings with Trade Minister Piyush Goyal. The next round of trade talks is set for March 10-14 in Brussels.
How does Trump’s tariff threat impact India-EU trade?
The European Union’s call for lower tariffs comes amid Trump’s threats to levy reciprocal tariffs from early April. It has caused anxiety for India’s exporters. The European Union is India’s biggest trading partner in goods. The trade cap is nearing $126 billion in 2024, marking an expansion of about 90% over the past decade.
According to experts, the EU seeks to boost economic and security ties with India, as part of its “de-risking” strategy. It will also diversify supply chains and reduce dependence on Beijing’s leading products. India is also looked upon by the European Union as a crucial partner in meeting security challenges, said the official, including cyber-attacks and tensions in the South China Sea and Indo-Pacific.
EU Commission president is also expected to pursue India’s support for a “peaceful and just deal” for Ukraine’s security, the official stated. As reported, the European Union and India could inscribe an agreement. It will be aimed to share classified security data to tackle common threats such as cyber-attacks and terrorism while investigating defence equipment trade.
However, despite these potential benefits, trade analysts expressed the visit may not produce tangible results. For a substantial partnership, the EU should accept India as a data-secure country.
As per analysts, while both flanks have worries about China, neither notices it as a top priority, India is concentrated on border apprehensions with China, while the EU is more involved with the Ukraine-Russia conflict and NATO issues.
