Global Economy

Extraneous elements slowing down India-EU trade pact talks, CBAM & EUDR unfair: Piyush Goyal



New Delhi: The EU’s deforestation regulation and Carbon Border Adjustment Mechanism (CBAM) are unfair which would impact Indian industries and that the bloc’s safeguard measures on some steel products are irrational due to which India may have to take other measures, commerce and industry minister Piyush Goyal said Friday.

At the launch of Federation of European Business in India (FEBI), he also said that India is keen to have a free trade agreement (FTA) with the EU and the process could be fast-tracked if the focus remains on business and trade issues and not on extraneous items falling outside the remit of the pact.

He also asserted that India should not be treated like Southeast Asian nations with which the EU has signed a trade agreement and the country can not sign a pact on dotted lines.

The minister said that the FTA talks can be fast-tracked and he is ready to engage on a daily basis like he had done with Australia, UAE, and the European Free Trade Association (EFTA) trade agreements.

“I can assure all of you, we are not looking at transposing what I gave to the UAE. These are two different economic situations. I am not looking at the EFTA agreement with the EU. Similarly, the EU needs to understand, I am not a country in south east asia with which you recently or sometime back did an FTA, where they can sign on the dotted lines on anything because they are not a democracy,” Goyal said.


He added that the EU will have to decide whether “we are looking” at expanding trade and business between the two sides or those which are dealt with by other international organisations .India and the EU, he said, should be focusing more on their mutual engagement through FTA of trade and business related issues and that the world today can not work on the principle of retaliation and it has to work on the principle of mutual cooperation and finding solutions.“Sadly, despite several efforts, the cooperative elements have not taken centre stage as yet and many issues have been left festering in this relationship,” he said adding these basic understandings need to be clarified on both sides.

Goyal also said that Indian industries are “confronted with unfair rules of deforestation, rules around CBAM and various other measures”.

Brazil, India, Indonesia and the US have raised concerns at the EU Deforestation Regulation (EUDR) which seeks to prevent the import of specified goods contributing to deforestation and forest degradation in the bloc. It covers coffee, leather, oil cake, wood furniture, paper, and paperboard.

The CBAM or carbon tax (a kind of import duty) will come into effect from January 1, 2026.

New Delhi has also proposed imposing retaliatory customs duties on certain goods imported from the EU, as the two sides failed to reach a consensus on the EU’s safeguard measures on some steel products at the World Trade Organisation.

Goyal said the developed world is taking such measures by “disrespecting” the multilateral agreements on climate change.

He said that in the Paris agreement it was decided that the developed world-which is in the first place responsible for the “mess of their in the ozone layer or the environmental problems of the world-will contribute to the low cost, long term financing, will provide grants, technology…COP 21 premise is sought to be demolished by the European Union”.

On the issue of imposing safeguard duty measures, he said these are “irrational duties and totally against the MFN (most favoured nation) laws of the WTO on certain steel products” and that India has been discussing the matter for the last five-six years now.

“I have been holding back, I have been negotiating and requesting …India does not have unfair trade practices, now should we be subject to that additional duty? Now after six years, we have to take other measures,” Goyal said and added that those measures are “not going to be conducive for the kind of good relations that we believe Europe and India share and should continue to share at the business level”.

He added that such issues and others like labour matters can best be addressed through bilateral discussions.

In India, no company has faced labour problems in a long time and that the last labour problem was in Maruti, 10 years ago.

“One issue in 10 years. Our companies working in many European companies are also confronted with significant labour issues,” Goyal said.

“It will be a good idea that we take up all these issues bilaterally, so that there can be ease of doing business on both sides and so that we can support each other in expanding trade,” he said.

On the issue raised by the EU side on the bilateral investment treaty, the minister said
that India has a Swedish company which has been working here for the last 120 years.

“India is a vibrant democracy with a rule of law. It protects investments. We had only one mishap the Vodafone retrospective taxation…our (BJP) party has publicly denounced that..We have withdrawn also and we have assured the world that we will not have retrospective taxes or policy decisions. But I can list out a number of such similar actions which call for distress to Indian industry (in EU)”.



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