India-EU : Trade Pact Draws Political Debate as Government Defends Economic Gains
India-EU: Commerce and Industry Minister Piyush Goyal has pushed back firmly against criticism from the Congress party over the recently concluded free trade agreement between India and the European Union, describing the deal as balanced and forward-looking. According to the minister, the agreement is designed to support India’s long-term growth by expanding market access and creating new opportunities for businesses, workers, and consumers.
The agreement, announced in New Delhi earlier this week, has been positioned by the government as a major milestone in India’s trade policy. However, it has also triggered sharp political debate, with the opposition questioning both the scope and the safeguards built into the pact.
Congress Raises Concerns Over Trade Safeguards
Soon after the agreement was finalised, the Congress party expressed reservations about several aspects of the deal. Party leaders argued that the government had failed to secure adequate protections for key domestic industries during negotiations with the European Union.
One of the central concerns relates to the EU’s Carbon Border Adjustment Mechanism, which imposes carbon-related charges on certain imports. Congress leaders noted that Indian steel and aluminium exporters have not been granted exemptions under this mechanism, potentially affecting competitiveness. The party also objected to tariff reductions or relief on more than 96 percent of EU exports entering the Indian market.
Questions Over Standards and Key Export Sectors
Congress General Secretary Jairam Ramesh further pointed to the EU’s strict health, safety, and product standards, which will continue to apply to Indian goods even after the agreement comes into effect. He suggested that these norms could pose challenges for Indian exporters seeking wider access to European markets.
Ramesh also highlighted refined fuels, India’s largest export category to the EU, arguing that the agreement does not sufficiently address vulnerabilities faced by this sector. According to the Congress, these unresolved issues raise doubts about whether the pact adequately safeguards India’s trade interests.
Government Pushes Back on Opposition Criticism
Responding publicly, Piyush Goyal dismissed the opposition’s arguments, saying that those now questioning the deal had missed opportunities when they were in power. In remarks shared on social media, the minister suggested that prolonged indecision in the past had cost the country jobs, income, and economic momentum.
Goyal argued that India’s electorate has repeatedly rejected such hesitation and instead supported policies aimed at deeper global engagement. He urged critics to recognise the ambitions of Indian entrepreneurs and manufacturers who are eager to compete internationally rather than placing obstacles in their path.
A Deal Built on Scale and Complementarity
In a detailed rebuttal, the minister expressed surprise that the agreement had been described as overhyped by some critics. He pointed to the scale of the partnership, noting the combined economic weight of the two sides, their trade volumes, and the size of the integrated market created by the pact.
Goyal emphasised that India and the EU are largely complementary economies, arguing that the agreement does not undermine domestic interests. Instead, he said, it is structured as a win-win arrangement that can accelerate growth and expand labour-intensive exports from India.
Addressing Carbon and Industrial Policy Issues
On concerns related to carbon measures, the minister said India has actively engaged with European counterparts to protect domestic exporters. He stated that practical and cooperative solutions have been identified through dialogue rather than rigid negotiating positions.
Goyal also outlined how the agreement’s provisions for the automobile sector are designed to support domestic manufacturing. Measures such as phased market access, quotas, and a focus on premium segments are intended to encourage global automakers to invest in India under the Make in India initiative.
Manufacturing, Jobs, and Long-Term Strategy
According to the minister, easing norms for completely knocked down vehicle imports would incentivise European manufacturers to establish assembly operations in India. Over time, this could lead to greater localisation, stronger supply chains, and the transfer of advanced manufacturing practices and research capabilities.
He added that such developments would benefit consumers by expanding choice, improving safety standards, and accelerating access to global technologies, while also generating employment and industrial capacity at home.
A Major Pact Amid Global Uncertainty
Leaders on both sides have described the India-EU agreement as the largest trade pact India has ever signed. European Commission President Ursula von der Leyen said the deal creates a free trade zone covering two billion people, with mutual benefits.
The agreement brings together two major economies at a time when global trade faces uncertainty from geopolitical tensions and shifting supply chains, underscoring its strategic significance.