New Delhi, India — January 28 (ANI): Amid growing concerns over trade-impeding regulations, India and the European Union have built two key safeguards into their free trade agreement to protect negotiated market access and benefits against future regulatory actions, officials said.
The provisions—a Rapid Response Mechanism and a Non-Violation Complaints clause—are aimed at addressing risks arising from the EU’s expanding regulatory framework, which Indian exporters and service providers have increasingly flagged as a source of uncertainty and compliance burden.
The safeguards assume significance against the backdrop of the EU’s growing use of regulations covering sustainability, climate action, labor standards, digital governance, and product compliance. While not directly discriminatory, such measures can materially affect market access for trading partners.
Officials said the two provisions would help India address future challenges posed by EU regulations and safeguard the benefits of the FTA.
Explaining the rationale behind the mechanisms, India’s chief negotiator, Darpan Jain, said regulations could emerge in the future that may not breach the letter of the agreement but could still disrupt trade flows.
“Regulations may come up which may raise concerns for trade. To deal with such situations, we have agreed on a high-powered rapid response mechanism which allows an issue to be taken up immediately between the two sides,” Jain told ANI.
He added that if an issue is not resolved at the technical or official level, it can be escalated to the ministerial level. “This escalation mechanism itself is a new element in the India-EU agreement,” he said.
Jain said the Non-Violation Complaints provision is designed to address situations where a new regulation, law, or administrative instruction does not directly violate the agreement but still impairs its benefits.
“There is no direct violation—that is why it is called non-violation—but the measure acts in a manner that market access gets impaired. This provision gives us a structured way to deal with such measures,” he said.
India and the EU signed the agreement on Tuesday, with officials describing it as one of the most comprehensive trade pacts concluded by New Delhi, combining market access with built-in safeguards against future regulatory shocks.
Under the agreement, India will secure preferential market access on 96.8 percent of EU tariff lines, covering 99.5 percent of India’s exports to the bloc. About 90.7 percent of Indian exports by value are set to become duty-free immediately upon the agreement’s entry into force, marking one of the deepest tariff liberalization commitments secured by India in any trade pact.
Labor-intensive sectors accounting for more than USD 33 billion in exports—including apparel, textiles, leather and footwear, and gems and jewelry—are among the biggest beneficiaries, with duty-free access taking effect from day one, officials said.
In agriculture, India has secured preferential access on around 87 percent of tariff lines for products of key interest such as tea, coffee, spices, table grapes, cucumber and gherkins, dried onion, sweet corn, select fresh fruits and vegetables, and processed food products.
The FTA provides market access in 144 services subsectors, including IT and IT-enabled services, professional services, other business services, and education. It also establishes a facilitative and predictable framework for short-term business mobility and temporary travel.
AYUSH practitioners will be able to offer services in the EU based on qualifications obtained in India. The agreement also provides for continued engagement on social security arrangements, with 13 agreements already in place and seven under negotiation.
About The Author
