The main economic implications of an EU-India free trade agreement

Abstract

In order to strengthen bilateral relations between India and the European Union, the two have set out on negotiating a free trade agreement. Despite India being regarded as a powerful global economy to emerge over the next decade, many areas of its economy lag behind compared to EU standards, and have resulted in major issues and cause for concern in negotiations between the two large trading partners. With the EU occupying a great share of the world's economy, it is easily understandable why a developing country such as India is looking to establish and finalize such a trade agreement. Contrastingly, India's sensational growth makes it an appropriate contender for increased better trade for the EU especially in impacting and allowing for further market access to Asia. This dissertation gives an assessment of relations between India and the EU to date, the key motives behind establishing a free trade agreement, and identifies the main stumbling blocks in ongoing negotiations. Focusing on the perspective of India and taking into account, India's rapid economic growth, this dissertation analyzes what India stands to gain from the free trade agreement being negotiated between India and the EU. It assesses the feedback from both academic professionals and the public and also aims to highlight the main costs and benefits which arc likely to appear out of this free trade agreement. Here findings include the fact that India shall benefit from a FT A in some sectors of its economy over others; specifically in the services industry, rather than in manufacturing and agriculture. The increase of prices and tariffs and their effect on local produce, remains a contentious issue amongst the Indian public. In addition, there is great fear surrounding access to medicine and intellectual property rights. Having said this, greater access to European markets shall bring better investment opportunities and room for increased specialization for Indian businesses and professionals. For the EU, gaining agreement with an emerging superpower that is India shall lead to positive results across the board. These findings are primarily based on research and discussion and should not be regarded as definitive.