Explained: This article explains the political background, key decisions, and possible outcomes related to Explained : India-EU FTA not a zero sum deal but a win-win deal: Piyush Goyal tells Jairam Ramesh and Its Impact and why it matters right now.
In a post on X, he also said that India’s quota based, premium segment focused and phased auto offer, with a time lag of five years for EVs from entry into force (EIF) is with an intent to boost Make in India.
“Liberalising CKD imports will encourage EU’s OEMs to set up local assembly lines. This serves as a stepping stone, moving foreign OEMs from “importing” to “assembling” and eventually to “full localisation” as they build local supply chains,” Goyal said in the social media post while replying to Congress leader Jairam Ramesh.
India and the EU concluded negotiations for a free trade agreement (FTA) Tuesday and the pact is expected to come into effect this year.
“This brings high-end manufacturing processes, quality standards, and advanced R&D practices into the Indian ecosystem. It will also create new demand, benefits consumers by expanding choice with faster access to global models. It also enhances safety and tech standards,” Goyal said.
Ramesh has said on X that India’s aluminium and steel exports to the EU have already fallen from $7 billion to $5 billion and are only expected to fall further beginning this year due to the enforcement of the CBAM since January 1, 2026.
“The Modi Government’s failure to secure an exemption for India’s aluminium and steel-makers from the Carbon Border Adjustment Mechanism (CBAM) is one of @INCIndia’s key concerns regarding the FTA,” Ramesh said while terming the FTA “hugely hyped”.“Over time, CBAM will also expand to include other categories of India’s industrial exports and can effectively nullify any gains India secures from the FTA,” he added.
He also raised concerns at the inclusion of automobiles in the FTA, saying that the
government opened up automobile sector for the first time ever in its FTA with the UK, and the FTA with the EU only opens up further risk for domestic automobile manufacturers.
“At a time when Electrical Vehicles (EV) are emerging as one of the most critical technologies of the 21st century, great care will have to be taken to ensure that India’s EV industry is not vanquished,” Ramesh said.
On Ramesh’s concerns on a large portion of India’s refined fuel being sourced from Russia and clarity on the future of these trade routes amidst pressure from the US, Goyal said: “The point on refined fuel is linked to extraneous reasons. Our Trade Agreement with EU is a long-term strategic engagement based on trust and mutual respect which will strengthen our trade routes”.
As per the minister, the deal is not a “zero sum deal but a win-win deal which will power our economic growth and create plethora of opportunities for our businesses and people”.
Ramesh flagged issues about the EU’s strict health and product safety rules, which will continue to be in force over Indian exports even after the FTA claiming that this can “easily become a non-tariff trade barrier”, and the EU has been accused of the same by other trade partners.
“Questions over Intellectual Property (IP) rights for our pharmaceutical sector are also unanswered,” he said.
Goyal, in his post, said that all countries, including India reserve their right to regulate for health and safety reasons.
“No one cedes them in a trade agreement. They are disciplined in a manner that they do not become unnecessary and unjustified impediment to trade. The ways to ensure that, are adequately provided for in the Agreement,” Goyal said.
The EU has also claimed privileged access to Indian services market in key sectors like financial services and maritime transport – exceeding India’s commitments with any other trading partner, including the UK and Australia, according to Ramesh.
The commitments in services are as per India’s domestic regime, Goyal replied.