New Delhi: Union Commerce and Industry Minister Piyush Goyal on Friday said India and the US may now consider moving towards winding down their bilateral trade talks as there are no “sticky issues” left to be resolved.
In an interview with HT three days after India and the EU announced the successful conclusion of negotiations for a free trade agreement (FTA), the minister described a definite shift in New Delhi’s trade strategy – from protectionist hesitations of the past to confident talks for a future $30 trillion economy – and stressed that for a developed India, engagement with the developed world is not optional. “You can’t live in isolation,” he said.
Have you found Europeans more receptive in the last six months?
No, they have been consistent. From the time we started talks in 2022, they have always worked very honestly and seriously in this direction. I found that he has made up his mind that he has to deal with India.
And we were also clear that if you have to be a developed nation, you have to engage with the developed world. You cannot live in isolation.
There was a lull in 2024. Because we went to the elections, then they went to the elections. Then in September-October (2024), once their new government came in, they appointed their best commissioner – their oldest serving commissioner – Maros Sefcovic, a very experienced person. And they told us that he was being appointed because he is the person who can take us across the finishing line. That was about a year and four months ago. He met me personally 10 times. Therefore, his commitment was total and he was sensitive to our complex issues.
What was the approach to dealing with sensitive issues?
That was one of the first things we decided – that both sides would keep sensitive issues aside. He too had his own sensitive issues.
Do you think the ratification deadline is achievable?
We have said that it will happen this year, 2026. Legal investigation is underway. Normally it takes four months. Then, it needs to go to their Parliament.
The German Chancellor recently said that the agreement should be completed as soon as possible to create the largest internal market in the world after China…
I think they’re pretty much on board.
Are you happy with the way the carbon issue and CBAM (Carbon Border Adjustment Mechanism) are being dealt with?
Yes. They recognize and know about our work on climate change issues, so there will be good support for us.
Now there is no expansion (of CBAM); I don’t think you’ll get that. If the expansion causes us to lose any business, there is a non-breach clause in the agreement. We have taken care of everything.
Regarding mobility, is there a pathway for Indian talent?
There is a compromise. Each EU member state has the ability to decide how many people and what types of people. The Ministry of Foreign Affairs is in active negotiations, and some – such as Germany – have concluded the mobility part. There is a shortage of skilled legal immigrants in every country. India’s best bet is that we always provide highly skilled talent, and we encourage legal immigration.
We do not send people illegally like other countries. That’s why they are willing to hire Indian workers, and Indians do not create local problems. Most follow Indian laws. No country in the world complained that Indians had created problems for them.
These two big FTAs that you have done – UK and then EU – what are the big learnings?
The biggest difference between the past and today is that India is a respectable country. People see political stability, they see macroeconomic stability, they see decisive leadership. They recognize the talent and skills of India. So, now there is a similar desire from the other side to engage and do business with India.
Second, India is now in a strong position with confidence. Earlier we used to talk on the current economy, which is a wrong strategy. PM Narendra Modi has changed it. Modiji has said, “You are negotiating future FTAs.” The past is not material. Today India’s $4 trillion economy is not physical. You are negotiating our $30 trillion economy in 2047. And this is what is attracting people from the other side.
So, now when I interact, I interact either as an equal or as someone who has more to give than to receive. And so, we get super deals.
Have we also become more practical in conversation? For example, there was a time when we were obsessed with wine when it came to the European Union.
I wish we had done this FTA 20 years ago. I can’t tell you how much opportunity we’ve lost. How many millions and crores of jobs have we lost? How many billions of dollars of foreign exchange would we have earned in 20 years had we not done this deal?
Now you tell me – wine? There are only 6,000 grape farmers who grow wine grapes. total production is difficult ₹1,000 crores. What’s more, I got a duty-free quota of table grapes.
So it wasn’t just a weakness – it was a lack of knowledge and a lack of understanding what you were protecting and saving versus what you were losing by not doing the work.
So clearly, I think it is a case of lost opportunities – huge lost opportunities and huge benefits that India could have gained.
What about automobiles? It seems that you have been successful in saving the domestic industry?
90% of our market – selling price is approx ₹2 million.
They can’t sell anything below that. An ICE (Internal Combustion Engine) engine costs €15,000. On top of that, you have clearing, forwarding, you have marketing costs, you have showroom costs, you have after sales service, dealer margin, then GST.
They can’t make a car for less than €15,000. Forget selling – they can’t make it.
To what extent will the EU agreement boost manufacturing in India, especially with regard to labour-intensive sectors?
Extremely. We got zero charges from day one in most areas. Of the $35 billion in labour-intensive exports, $33.5 billion became zero duty on the first day.
Bangladesh exports $30 billion to the EU against our exports of $7 billion.
Bangladesh was a zero duty LDC (least developed country). We had MFN (Most Favored Nation) duty and were paying up to 12% duty. Now, we are at zero. Textile exports alone could be worth $40-50 billion; The EU imports $253 billion.
How do we build our capacity and quality to meet this demand?
If we can export $7 billion, we can also export $70 billion. Our quality will improve as demand increases. I have been an advocate of following Prime Minister Modi, who has been talking about quality, for 14 years.
With Prime Minister Mark Carney coming to power in March, where does the Canada Agreement stand? Do you have to start from scratch?
They are very keen to speed it up. We are working with them on the terms of reference. But, we have to start from zero.
Is the UK deal a model for how we do deals in the developed world?
The UK one was a fantastic deal. This EU FTA is equally good. However, very rarely can you simulate just one deal because each country’s circumstances, size of economy and interests matter. Each deal stands on its own feet.
What is the status of the US deal? Are there any remaining sticking points? And when will it strike?
It’s a positive, good deal. We are actively engaged. We never make any deal with a deadline in mind; When both parties are satisfied the date will be announced. I don’t think there are any complex issues left to resolve. Now we can consider moving toward closure.
Despite tariffs imposed by the US last August, overall exports have seen positive growth. What have we done well?
There is greater awareness that people need to step out of their comfort zones and explore new markets and products. New exporters are emerging, and service exporters are evolving into new age technologies.
What’s next on your agenda?
We are focusing on manufacturing and promoting services on a large scale. We will continue to give a big boost to innovation, R&D, startups (tech, agritech, biotech) and logistics. International engagement with relevant partners, particularly the developed world, will continue.
Have you done internal modeling on how much FDI will come into India as a result of this EU agreement?
We do a lot of modelling, but we will wait for the agreement to come into effect to see how Indian industry takes advantage of this opportunity. They have to expand, invest in technology and skill their workforce. We are working with export promotion councils and chambers of commerce to spread the benefits of the eight FTAs signed so far. Export-driven growth is important; No country has developed without international participation.
Do you have any plans in terms of capacity building for the textile industry?
We are working very closely through our export promotion councils, our respective ministries and often the chambers of commerce, both at the Center and in the states. We will take it to the last level and encourage more and more people to look towards international markets. Because if you look at India’s performance in overall GDP growth – exports have performed better every time. In fact, no country in the world has become a developed country without international participation.
