EU, India agree on 5-year MFN status under proposed FTA
The European Union (EU) and India have agreed to grant each other the ‘most favoured nation’ (MFN) status for five years from the date their planned free trade agreement (FTA) comes into force, according to a draft of the deal released recently by the Indian commerce ministry.
This implies neither side can give more favourable tariff terms to other trading partners for five years.
Both sides announced on January 27 that talks on the FTA had concluded. The pact will allow 93 per cent of Indian exports to enter the EU duty free.
The agreement also contains an annexure that provides for mediation, allowing disputes to be resolved through a fast-track process with the help of a mutually agreed mediator.
The two sides have agreed not to introduce new import or export curbs beyond what is allowed under World Trade Organisation (WTO) rules. They agreed to step up cooperation in digital trade, agreeing to reduce unjustified barriers and supporting an open and secure online space..
The draft text sets out plans for closer customs cooperation and quicker clearance of goods. These commitments will become binding after ratification.
The two sides will start sharing annual import data one year after the deal takes effect. They have also agreed to provide fair and accessible appeal processes for customs decisions related to imports, exports or goods in transit.
