Piyush Goyal meets German delegation, eyes deeper ties in AI, clean energy and manufacturing

Commerce and Industry Minister Piyush Goyal met ministers and business leaders from the German state of Hessen in New Delhi on Tuesday, as India looks to deepen economic and technology ties with Europe ahead of the implementation of its free trade agreement with the European Union.Goyal met Hessen Minister-President Boris Rhein and Minister for Federal and European Affairs, International Affairs and Debureaucratisation Manfred Pentz, along with a delegation of leading German businesses.The discussions explored opportunities for collaboration across artificial intelligence, clean energy, research and development, data centres, global capability centres (GCCs), pharmaceuticals, chemicals, manufacturing, fintech, deep-tech and skilling.Goyal said the engagement was aimed at tapping opportunities emerging from India’s free trade agreement with the EU to deepen partnerships in trade, technology, investment and innovation.Germany is the largest economy in the 27-member European Union and one of India’s key economic partners in the bloc.India and the EU have concluded negotiations on the trade agreement and are looking to sign the pact in 2026, with implementation targeted by the end of FY2026-27.What the India-EU FTA offersThe agreement is expected to significantly reduce tariffs on trade between the two economies.The EU expects the deal to double its goods exports to India by 2032. The agreement will eliminate or reduce tariffs on 96.6% of EU goods exports to India by value, with the EU estimating that European exporters could save around €4 billion annually in duties.Agricultural and food products are among the areas where tariffs will fall substantially. Indian tariffs on European wines are set to decline from 150% initially to 75% and eventually to levels as low as 20%. Tariffs of up to 50% on some processed agricultural products, including bread and confectionery, will also be removed.European companies will also receive greater access to India’s services market.The agreement currently comprises 21 chapters and covers 23 areas, according to the Commerce Ministry. These include goods, services, sanitary and phytosanitary measures, technical barriers to trade, intellectual property rights, sustainability, subsidies, MSMEs, rules of origin, anti-fraud measures and legal issues.The final number of chapters could change following legal scrubbing. Government procurement, energy and critical minerals do not currently have dedicated chapters.CBAM remains an important issueThe European Union’s Carbon Border Adjustment Mechanism (CBAM) remains an important issue for Indian exporters.The Commerce Ministry had said in January that although India had not received a specific carve-out from CBAM under the FTA, any flexibility subsequently extended to another country would also be available to India to ensure equal treatment.A technical group is also expected to be established under the FTA to facilitate accreditation of Indian verifiers for assessing carbon footprints. Any carbon pricing or emissions-trading mechanism introduced by India in the future would also be factored into the CBAM framework.The EU will provide technical assistance to help reduce carbon emissions in India’s industrial sector, while the two sides are also expected to issue a joint statement on decarbonisation.The Commerce Ministry has said a non-violation clause will help protect India’s interests if future measures affect concessions granted under the trade agreement.Safeguards against dumpingConcerns over the potential routing or dumping of Chinese goods have also featured in discussions around the agreement.The Commerce Ministry has said both sides recognise each other’s sensitivities and that the pact contains bilateral safeguards and trade-remedy provisions to address dumping.The FTA also contains commitments relating to post-study work visas, in addition to existing arrangements, with no cap on student visas.Social security agreements, however, remain within the jurisdiction of individual EU member states. Thirteen of the EU’s 27 members have already concluded such agreements with India.Investment ties could deepen furtherIndia and the EU are separately negotiating a Bilateral Investment Treaty and an agreement covering geographical indications, with the Commerce Ministry saying discussions are progressing positively.Negotiations on investment liberalisation in non-services sectors are expected to continue for two years after the FTA comes into force.Investment ties between India and the EU are already substantial. India’s cumulative FDI outflows to the bloc stood at around $40.04 billion between April 2000 and March 2024, while cumulative EU FDI inflows into India reached about $117.4 billion between April 2000 and September 2024.More than 6,000 EU companies operate in India, while investment from the bloc accounted for over 16.5% of India’s cumulative FDI equity inflows from all countries.Goyal’s meeting with the Hessen delegation comes as both sides look to use the trade agreement to translate lower trade barriers into greater investment and collaboration in areas ranging from advanced manufacturing and clean energy to AI and deep-tech.

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