India’s trade pacts with the UK, EU to have separate chapter on sustainable development

“Discussions on trade and sustainable development have been gaining traction in the recent bilateral discussions to have a chapter on the subject,” said an official.

The government has also reached out to industry to indicate the possible asks that India could make to the EU and UK for inclusion in the sustainable chapter. Senior government officials are in the UK at present to finalise the terms of reference of the pact.

“We have reached out to industry because the UK and the EU have concerns related to the environment. However, most of our exports including speciality chemicals and plastics are compliant with the global rules and will not face any issues,” the official added.

The EU mandates that all its trade agreements contain rules on trade and sustainable development and follow international labour and environment standards and agreements, sustainably trade natural resources such as timber and fish, and combat illegal trade in threatened and endangered species of fauna and flora. Besides, the grouping also requires that trade should support tackling climate change, and promote practices such as corporate social responsibility.

“Exporters who deal with such geographies are usually large firms who anyway adhere to the global environment and labour rules. So, compliance in these trade pacts would not be difficult for them,” said an industry representative.

However, experts said that the inclusion of non-trade issues in bilateral FTAs can have far reaching effects on India’s multilateral commitments as New Delhi is opposed to such issues at the World Trade Organization.

“This will be a change in India’s stance and the country might lose its moral ground to oppose it in the WTO. This will lead to new obligations such as zero tariffs, standards and compliances that our industry is not facing now,” said an expert.

India is keen to ink technology transfer agreements in lieu of granting market access to the EU and the UK to support domestic manufacturing.

“It would be ideal if in the process of giving them market access, they ink technology transfer agreements with us with a time-bound sunset clause. This will enable India to manufacture those goods within a specific time period,” the official said.