One deal, three Setbacks: How India cooked Turkey, Pakistan, Bangladesh with EU trade agreement | India News
India’s trade agreement with the European Union also caused ripples from the border to the USA. Not only Bangladesh and Pakistan, but also the USA and Türkiye will feel the excitement of the historic trade agreement between India and the EU. According to the agreement, customs duties on more than 90 percent of EU exports to India will be eliminated or reduced; This includes taxes as high as 44 percent on machinery, 22 percent on chemicals and 11 percent on pharmaceuticals, which will mostly be phased out.
Tariffs on EU beer will be reduced to 50 percent, while duties on chemicals, aircraft and spacecraft will be eliminated for almost all products. The EU estimates that the deal could double EU exports to India by 2032 and save up to 4 billion euros in annual duty on European products. But this will also harm India’s enemies.
Impact on Türkiye
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Relations between India and Türkiye deteriorated following Operation Sindoor, in which Ankara helped Pakistan with drones and stray munitions. Since then, relations between the two countries have become tense. Now the India-EU trade deal is likely to harm Türkiye as well.
In particular, the EU-Türkiye Customs Union obliges Ankara to match the EU’s common external tariff with any partner country. Ankara had previously conveyed its concerns about this issue to the EU, but no progress was made towards solving the problem. When the EU lowers tariffs for an FTA partner (like India), Türkiye is required to do the same for that country. However, India will not be obliged to do the same to Türkiye. It will be interesting to see how Türkiye reacts to this.
Impact on Bangladesh
A few months ago, during an interview, Bangladesh’s interim leader Muhammad Yunus said that the US may shift the bases of Indian companies to Bangladesh due to high tariffs on New Delhi and low on Dhaka. Bangladesh, also a Least Developed Country (LDC), had zero taxes on exports to the EU, while India faced higher taxes. This helped Dhaka gain a larger market share in the EU.
Reacting to the EU trade deal, Commerce Minister Piyush Goyal said, “India can quickly increase its textile exports to Europe from $7 billion to $30-40 billion. We always asked how Bangladesh exported so much to Europe. They had zero taxes and captured a share of $30 billion.”
As Indian garment exports compete with Bangladeshi products in the EU, Dhaka’s market share is sure to shrink due to price and quality.
Impact on Pakistan
Pakistan, whose fragile economy is struggling to survive, is disturbed by India’s growing ties with the EU. The India-European Union Free Trade Agreement has also irritated the Pakistan-backed Khalistanis. They feel that close ties between the European Union (EU) and India mean that India will gain more leverage in targeting Khalistani elements.
Khalistan groups, which have made countries such as Canada, Germany and England their base, believe that this closeness between India and the EU will harm their movements. The EU-India defense partnership also includes counter-terrorism cooperation and thus poses a challenge for Khalistani terrorists.
Additionally, the United States was disturbed by the agreement because its pressure tactics against New Delhi did not materialize. Despite President Donald Trump making ridiculous statements, India refused to yield and the Indo-US trade deal remained deadlocked. Now, with America missing out on the strategic partnership agreement, the EU-India trade deal will put more pressure on Trump from his supporters and leaders.
