India has begun intense negotiations with the European Union to eliminate non-tariff barriers as part of their ongoing talks about a free trade agreement.
The negotiations cover various sectors like pharmaceuticals, engineering, electronics, and agriculture. Despite concluding their seventh round of negotiations recently, India and the EU are still at odds over the definition and impact of these non-tariff barriers.
The EU’s stringent standards and regulations, such as the Carbon Border Adjustment Mechanism and Deforestation-free Regulation, are posing challenges for Indian exports, particularly in sectors like agriculture and chemicals.
This mismatch in standards and affordability is hindering India’s ability to meet EU requirements and compete effectively, especially when compared to China’s compliance levels.
For instance, chemical exports from India have been affected by the EU’s Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) regulations, while rice exports have faced restrictions due to maximum residue levels (MRL) limits imposed by the EU.
This discrepancy in standards is a major stumbling block in the negotiations between India and the EU, as each party has different priorities and perspectives on non-tariff barriers.
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