In order to strengthen its exports in the backdrop of the withdrawal of preferential duty access by the European Union (EU), the Indian government has decided to negotiate free trade agreements with the EU.
Already, it has signed free trade agreements with Australia and the UAE, such agreements have been pursued vigorously with the United Kingdom and the EU. It is therefore expected that Indian exports to these countries will increase in the near future.
It may be noted that the EU had withdrawn preferential tariffs for several Indian imports, including textiles and apparel early this month, thus exposing Indian textile exports to 12% duties in Europe.
Meanwhile, the Indian trade bodies are of the view that not all the products mentioned in the list of 10 categories would be covered by the EU decision, set to be implemented in 2023.
India currently makes considerable use of GSP trade preferences and exports about 88.2% of eligible products at reduced rates to the European market. India is a beneficiary of the EU’s Standard GSP. With a per-capita income of 20 in 2020, India is classified as a lower middle-income country by the World Bank.
