India-EU Ties: Trade, RoDTEP and Areas of Cooperation

Why in the news

India-EU trade links came into focus as India looked at tools such as RoDTEP to deal with duties imposed on its exports by major markets.

Key facts

• The European Union is a political and economic union of 27 states, created under the Maastricht Treaty (in force 1 November 1993) and with its own currency, the euro.
• The EU is India’s largest trading partner; trade in FY24 was about USD 86 billion.
• Merchandise exports to EU members were about USD 65 billion in 2021-22, against imports of USD 51.4 billion.
• Iron and steel exports to the EU: USD 6.64 billion in 2023-24.
• EU share in foreign investment stock in India: about €63.7 billion (2017) to over €87.3 billion (2020).

Countervailing duties

In 2020 the US and EU imposed CVDs on some Indian goods such as paper file folders, alloy aluminium sheets and forged steel fluid. CVDs are tariffs that offset subsidies a government gives its domestic industry. The commerce ministry is building a mechanism to scrutinise RoDTEP refunds to reduce such duties.

About RoDTEP

• Duty waiver scheme in force since 1 January 2021, run by the Department of Revenue, Ministry of Finance.
• Refunds taxes, duties and levies paid in making and delivering goods that no other scheme refunds.
• Replaced MEIS, which was found to go against WTO rules.
• Extended to Advance Authorisation holders, EOUs and SEZ units; sectors include engineering, textiles, chemicals, pharma and food processing.

Relationship milestones and cooperation

• Cooperation Agreement 1994; first summit 2000; Joint Action Plan 2005; renewed dialogue 2017.
• Areas: FTA talks, trade and investment, infrastructure, strategic partnership, development aid, security, cyber and climate, research (Horizon 2020), exchanges (Erasmus+), and joint work at the UN, WTO and G20.

Exam angle

• Treaty creating the EU: Maastricht Treaty.
• RoDTEP replaced MEIS; ministry: Finance.
• Related terms: CVD, FTA, Erasmus+, Horizon 2020.