Will the EU-India Free Trade Agreement Be Good for Sustainability?
- Muhammad Ahmad
- Dec 12, 2024
- 2 min read
The EU-India Free Trade Agreement aims to integrate green trade and sustainability into economic growth
A Trade Deal Focused on Economic Growth and Environmental Impact
The EU and India are negotiating a Free Trade Agreement (FTA) to boost trade and sustainability.
Key areas of focus include renewable energy, sustainable agriculture, and green technology transfer.
The agreement has the potential to enhance economic resilience while addressing environmental challenges.
India’s Commerce Minister, Shri Piyush Goyal, met with EU Ambassadors to discuss the Free Trade Agreement (FTA) negotiations between India and the EU. The aim is to forge a balanced, ambitious, and mutually beneficial deal that increases trade and addresses both regions' sustainability goals. Minister Goyal emphasized the importance of the “Common But Differentiated Responsibility” (CBDR) principle to account for the developmental needs of each party while progressing on environmental measures. India’s trade with the EU reached USD 137.41 billion in goods in 2023-24, making the EU India’s largest trade partner.
This FTA holds the potential to align economic growth with sustainability. India and the EU are focused on green trade, including renewable energy, sustainable agriculture, and green technologies. By collaborating on these areas, the agreement could reduce carbon footprints, advance clean energy, and promote sustainable practices.
Green Trade Between EU and India
Green trade between the EU and India is growing, with both regions committed to climate action. The EU’s leadership in renewable energy and India’s clean energy ambitions align well. India aims to generate 500 GW of non-fossil fuel-based energy by 2030, and the EU can help by providing technology and expertise in solar, wind, and biomass energy. The FTA could also support sustainable agricultural practices and green technology transfer, helping India reduce its carbon footprint.
Minister Goyal highlighted that India’s economy is set to grow at 7-8% annually, with expectations of becoming the third-largest global economy by 2047. However, he stressed that the agreement must account for India’s developmental challenges and ensure that environmental goals do not hinder economic growth.
The EU’s strict environmental regulations, like the Carbon Border Adjustment Mechanism (CBAM), could pressure India to improve environmental standards. Additionally, India faces challenges scaling up green industries due to infrastructure constraints and the need for affordable energy. Balancing economic and environmental goals in the FTA will be critical.
The EU-India FTA could drive sustainable growth if it balances economic development with environmental protection. The agreement could foster a greener, more resilient global economy by focusing on green trade and renewable energy.