India-EU Trade Deal: With the Free Trade Agreement (FTA) between India and the European Union (EU), it will be no less than a challenge for Pakistani products to prove themselves in the European markets.
Pakistan's reaction to the FTA between India and the EU, know what the experts there said?
India-EU Trade Deal: The Free Trade Agreement (FTA) between India and the European Union (EU) has increased tensions in Pakistan. Pakistan fears that the FTA signed with India could reduce its exports to the EU.
In any case, Pakistani exporters and analysts have already warned that this deal could weaken Pakistan's position in its second-largest export market, as Indian products will gain widespread tariff-free access to European markets. This would lower prices for Indian products there, boost demand, and hurt Pakistan's profits. Currently, Pakistan is reviewing the impact of the newly signed free trade agreement between India and the European Union.
Why is Pakistan tense?
According to a PTI report, at the weekly press briefing, Pakistan Foreign Ministry spokesman Tahir Andrabi said that Islamabad is aware of the agreement and remains committed to its trade relations with the EU. He said, "The relationship between Pakistan and the EU has long been friendly and mutually beneficial. The EU's Generalized Scheme of Preferences Plus (GSP+) has proven to be a win-win model for Pakistan."
It should be noted that under this GSP+, approximately 78% of Pakistani products receive duty-free access to the 27 countries of the European Union. Pakistan has been benefiting from the EU's GSP+ status since January 2014. This has significantly increased Pakistan's textile exports to European markets. Pakistan fears that the immediate duty-free access India receives through the FTA could narrow the tariff gap available to Pakistani exports under GSP+, especially in the textile and clothing sectors.
What are the experts saying?
Kamran Arshad, chairman of the All Pakistan Textile Mills Association (APTMA), told the Pakistani newspaper Dawn that the EU's 27 member countries buy approximately $8.8 billion, or 27.2 percent, of Pakistan's total exports and approximately $7 billion, or 39 percent, of its textile shipments annually. Now that India has gained duty-free access to 100 percent of textile and clothing tariff lines, this could increase competition for Pakistan in European markets. Shankar Talreja, head of research at Topline Securities, says, "With the implementation of the FTA, Pakistan risks losing the benefits it has been enjoying. This could increase costs for domestic industries in the future."
