India-EU FTA Faces Hurdles: CBAM, Non-Tariff Barriers Concern Jefferies

• Jefferies highlights non-tariff barriers, especially the Carbon Border Adjustment Mechanism (CBAM), as key concerns for India in the India-EU Free Trade Agreement (FTA).
• CBAM aims to price carbon emissions on imported goods, potentially impacting Indian exports by making them costlier.
• India seeks easier services exports and better visa access for its workforce, while the EU desires greater access to India's financial and legal sectors.
• The FTA, nearing finalization, focuses on autos, electronics, textiles, pharmaceuticals, and chemicals, with agriculture and dairy largely excluded.
• An FTA could significantly boost India's textile exports to the EU and potentially lead to gradual tariff reductions in the auto sector.

Why It Matters: Non-tariff barriers and CBAM pose significant challenges for India in the impending India-EU FTA.