GTRI Warns India Must Fix Food Safety Before EU Trade Pact
The think tank cautions that weak domestic standards could leave Indian farm exports exposed even as the India-EU free trade agreement nears implementation
Synopsis
The Global Trade Research Initiative has cautioned India that it is at risk of compromising its bargain in the agricultural trade if it fails to reform its food security system before it finalises the India-EU free trade agreement. The think tank's report recommends the system to be modern and science-based, which will not only ensure protection for consumers, but also prevent the foreign regulations from being used to unfairly curb Indian exports.
AdvertisementThe Core Warning
The Global Trade Research Initiative has urged India to put more effort into food-safety mechanisms, given the imminent implementation of the proposed India-EU free trade agreement, or else it will be subjected to greater pressure on its agriculture industry.
The report by founder of GTRI, Ajay Srivastava and Shantwna Dixit, Centre for Environment and Agriculture, said India cannot be weak on both counts: it has to become robust in the domestic food safety system and also ensure that foreign regulations don't turn into disguised restrictions on India's exports.
AdvertisementA Two-Sided Risk
The think tank categorises this as a double exposure. GTRI cautioned that if India's own agricultural exports are rejected at the European borders, it is also likely to see its market being opened up even more for food products from Europe.
The suggested solution is structural – GTRI recommended the launching of a modern, science-based and reciprocal food-safety system which would guarantee consumer safety and enhance the competitiveness of food exports.
Tariffs Aren't Everything
The report's key message is that while paper access to markets is possible, in practice it is not. It has found that reduced tariffs under the trade agreement will have limited impact if domestic enforcement and regulatory parity are not achieved in India's agricultural sector that continues to have severe non-tariff barriers.
This is not a new worry for GTRI. Srivastava has previously highlighted the high costs of compliance by small Indian exporters after EU regulations like REACH, the EU chemicals registration regime, came into effect since 2007, as they could no longer afford to register the chemical products in the EU and only larger businesses would be able to sustain trade.
AdvertisementHe has said a similar situation could occur in fisheries and other sectors under the new agreement, and newer measures such as EU's carbon border and deforestation regulations are also trade barriers clad in the mantle of standards.
The EU's Position
Inspections of pesticides and animal welfare are to be reinforced, while the European Commission will be stepping up audits and reinforcing border controls on imported food, animal and plant products. Under the deal's terms, all of EU's strict health and food safety regulations would apply to all Indian imports, without exception.
Why It Matters
The EU-India deal is said to be the largest trade opening that either side has ever made. However, in a familiar reality of modern trade diplomacy, eliminating tariffs does not necessarily lead to market access if there are regulatory or sanitary standards that are not aligned.
The next few years will see whether India's reform process matches the aspirations of the deal, for Indian exporters, especially smaller farmers involved in agriculture.
