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India-EU FTA: Agri-Trade Gears Up for New Rules
8 Feb
Summary
- EU's Green Deal introduces 'Sustainable Food Systems' chapter.
- Indian agri-exports to EU at $5.25 billion in 2024-25.
- EU's strict food safety rules challenge Indian dairy exports.
The recent India-EU trade agreement introduces a complex framework for agri-food negotiations, encompassing tariffs, non-tariff measures, and labor and environmental standards. A notable addition is the EU's 'Sustainable Food Systems' chapter, aligning with its Green Deal objectives.
In the 2024-25 fiscal year, India's agri-exports to the EU reached $5.25 billion, constituting over 7% of its total exports to the bloc. Key commodities include marine products, coffee, spices, and rice. While India maintains a positive agri-trade balance, its 2.3% share of EU agri-imports indicates significant room for growth.
However, Indian exporters face hurdles due to stringent EU regulations, including high tariffs on some products and rigorous food safety standards. For instance, dairy exports are restricted by traceability and certification requirements. Rice exports have also faced rejections due to food safety concerns, notably the presence of tricyclazole.
The EU's Corporate Sustainability Due Diligence Directive (EUCS3D) further imposes obligations on companies to manage supply chain risks, potentially increasing costs for Indian farmers and small businesses. To capitalize on the FTA, exporters must focus on traceability, reducing pesticide use, environmental audits, and greenhouse gas emission reduction.
