INDIA-EU FTA ON IMPORT DUTIES (Syllabus: GS Paper 2 – IR)

Context: India recently proposed resolving a longstanding dispute with the European Union by offering exclusive import duty concessions for specific information technology products within the proposed bilateral free trade agreement.

Key Points

• The government is considering restricting the reduction in information and communication technology (ICT) tariffs to EU members, addressing concerns related to these duties.
• Lowering tariffs for non-FTA countries would necessitate India applying equivalent duties to their information technology imports on a Most Favoured Nation (MFN) basis.
• India and the EU formally re-launched negotiations on FTA in June 2022.
• As per the WTO process, bilateral consultation is the first step to resolve a dispute when a complaint is filed. 
• If both sides are not able to resolve the matter through consultation, either of them can seek establishment of a dispute settlement panel.

European Union (EU)

• About: EU is a supranational political and economic union of 27 member states that are located primarily in Europe.
• Nuber of Countries: 27 Countries
• European Union Countries: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
• Objective: EU promotes democratic values in its member nations and is one of the world's most powerful trade blocs.
• Headquarters: Brussels (Belgium)