European Union Ambassador to India Hervé Delphin said the India-EU Free Trade Agreement must include an investment-liberalisation chapter to succeed.
The proposal aims to deepen economic integration and boost technology cooperation between the two entities. This agreement would cover a trade landscape valued at USD 11 trillion [1] and impact a population of two billion people [1].
Delphin said Thursday that India needs to reform its approach to foreign capital. He said the inclusion of an investment liberalisation chapter is essential for the success of the India-EU FTA. Specifically, he said that India needs to liberalise its investment policies further in the non-services sector [1].
Beyond the broader trade agreement, the EU envoy is pushing for a separate legal framework to secure capital. Delphin said the EU urges an early conclusion of the investment protection pact [2]. Such a pact would provide legal safeguards for European investors operating within Indian markets.
The scale of the proposed deal is significant, representing one-fourth of global GDP [1]. Under the current framework, more than 99% of Indian goods would receive tariff cuts [1]. Similarly, 97% of EU goods would see tariff reductions [1].
These measures are intended to remove barriers that have historically hindered European firms from fully entering the Indian market. By combining tariff reductions with investment protections, the EU seeks to create a more predictable environment for long-term industrial cooperation.
“"India needs to liberalise its investment policies further in the non-services sector."”
The EU's insistence on an investment-protection pact and non-services sector liberalisation indicates that tariff reductions alone are insufficient for European strategic interests. By seeking these specific legal guarantees, the EU is attempting to mitigate the risks associated with India's regulatory environment, aiming to transform the FTA from a simple trade deal into a comprehensive economic partnership.
