India Spain ties: A renewed push for EU-India Free Trade Agreement!

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India (Commonwealth Union)_ In a significant diplomatic milestone, Indian Prime Minister Narendra Modi and Spanish Prime Minister Pedro Sanchez have embarked on a journey to enhance bilateral relations between their nations, marking a Spanish premier’s first visit to India in nearly two decades. The two leaders met at the historic Laxmi Vilas Palace in Vadodara, where they discussed a comprehensive range of topics, including political, economic, defense, and security collaboration. This meeting follows the inauguration of a new production facility for C295 military transport aircraft, symbolizing a pivotal moment in India’s defense modernization efforts.

 

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During their talks, Modi and Sanchez signed several agreements aimed at fostering cooperation in key areas. Notably, a memorandum of understanding (MoU) on rail transport was established, which aims to enhance collaboration in the design, development, and operation of rail infrastructure, urban and regional systems, and equipment. Additionally, an agreement on customs cooperation was reached, which includes the establishment of a fast-track mechanism to facilitate mutual investments. Both leaders declared 2026 as the “India-Spain Year of Culture, Tourism, and AI,” further emphasizing the depth of their commitment to strengthening ties.

 

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Following the bilateral discussions, the Ministry of External Affairs (MEA) of India announced a renewed push for an early and ambitious Free Trade Agreement (FTA) with the European Union (EU). This announcement comes after years of negotiations that have been ongoing since 2007, underscoring the importance both India and the EU place on finalizing a comprehensive trade deal. The FTA aims to double bilateral trade and investment, with a focus on reducing tariffs and addressing market access challenges. Additionally, the urgency surrounding the FTA discussions was echoed by MEA Secretary (West), Tanmaya Lal, who noted that both India and Spain are keen on advancing negotiations. “This is an issue of mutual interest,” Lal stated, highlighting the shared goals of both nations. The negotiations encompass not just the FTA but also an investment protection agreement and an agreement on geographical indications (GIs).

 

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Furthermore, Union Minister Piyush Goyal reinforced this sentiment at a recent conference, emphasizing India’s appeal as a vast market with a young and aspiring population of 1.4 billion. Goyal pointed out that the European Union possesses the technology and innovation necessary to enhance economic ties. He remarked, “A deeper engagement between India and the EU, possibly through an FTA, will benefit both sides,” stressing the importance of collaboration to overcome the challenges posed by high manufacturing costs and service delivery. The backdrop of Modi and Sanchez’s discussions also included pressing global issues such as the conflicts in Ukraine and West Asia. Their dialogue reflects a broader geopolitical understanding and a commitment to collaborative solutions in these challenging times.

 

Prime Minister Modi warmly greeted Sanchez, reminiscing about their missed opportunity at the G20 Summit in New Delhi last year. He highlighted the significance of Sanchez’s visit during the festival of Diwali, referring to Gujarat as the “land of festivals.” Modi expressed hope that Sanchez’s visit would bring renewed energy to the India-Spain relationship. Furthermore, the economic partnership between India and Spain is notably robust, with two-way trade valued at approximately $10 billion. Spain ranks as the fifth largest economy in the EU, and its investments in India total around $4 billion, while Indian investments in Spain have reached $1 billion. These figures underscore the growing interdependence between the two nations, facilitated by a series of strategic agreements.

 

As part of their collaboration, the MoU on rail transport will not only enhance safety and maintenance protocols but also strengthen training mechanisms in both countries. The significance of this agreement is further highlighted by Spain’s advanced capabilities in rail infrastructure, which could be leveraged to enhance India’s railway network. Additionally, the discussions and agreements finalized between Modi and Sanchez signify a proactive approach to international relations, particularly as both nations navigate the complexities of global trade and security. As the EU-India FTA negotiations gain momentum, the partnership with Spain serves as a catalyst for broader economic integration, opening up avenues for investment and collaboration in various sectors.

 

Furthermore, the recent bilateral meeting between Prime Minister Modi and Prime Minister Sanchez marks a pivotal step in strengthening India-Spain relations and advancing negotiations for a comprehensive EU-India FTA. The commitment to enhancing cooperation in rail transport, customs, and cultural exchange signals a promising future for both nations, with the potential for significant economic growth and strategic partnership on the global stage. As these discussions continue, the anticipation for an ambitious trade agreement grows, promising mutual benefits for India, Spain, and the broader European Union.

 

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