India is attempting to strike an early harvest trade deal with the European Union (EU) if talks for a comprehensive free trade agreement (FTA) get prolonged due to pending issues where there is no agreement between the trade partners. The early agreement will be similar to the initial tranche of the India-US bilateral trade agreement (BTA) that is being negotiated at the moment.  

Senior commerce ministry officials said India is seeing such bilateral agreements or FTAs as the best bet to minimise the negative impact of unexpected geopolitical crises and tariff or non-tariff barriers imposed by countries, the U.S. President Donald Trump's 'reciprocal tariff' plan being the latest such instance.

“If some FTA negotiation matters that are not very core to the trade are taking more time, it’s better to focus on the core trade first. So, we are discussing with the EU if there can be an early harvest or the first tranche where we can do a faster deal than if we involve all the subjects which are in the FTA with the EU. It’s a very pragmatic approach towards the EU, same as our talks with the US or what we did with Australia,” a senior ministry official said.

The Commerce Ministry officials are confident that the initial tranche of the India-US Bilateral Trade Agreement (BTA) can resolve many of the pending issues the U.S has with India and benefit overall bilateral trade growth. “There are growth concerns as well as opportunities for India as far as US tariffs are concerned. Since India has already taken a path where we will be going for trade liberalisation with the US, a pathway that was decided at the leaders' level, followed by subsequent meetings and ongoing negotiations, our trade with the US will grow,” a senior ministry official said. India and the US have set a bilateral trade target of $ 500 billion for 2030. The officials also point out that post-signing of FTAs, India has seen increased trade with countries like Australia and the UAE.

The commerce ministry is also keeping a tab on a possible surge in imports of several commodities after U. S President announced different levels of import tariffs for different countries. “We have identified some countries for more intense watch, we have also identified some commodities for intense watch,” an official said.