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There is a total trade of Rs 1.10 lakh crore between Pakistan and EU.
1 Jobs in Pakistan are at risk due to the Free Trade Agreement (FTA) between India and the European Union (EU). He also fears a loss of billions of dollars.
According to media reports, Pakistan said on Thursday that it is in touch with EU officials regarding this agreement. He is trying to understand what impact the India-EU FTA will have on his exports.
At the same time, former Commerce Minister of Pakistan Gohar Ijaz wrote on social media-
Pakistan’s ‘zero-tariff honeymoon’ with EU is over and nearly 10 million jobs are at risk. The government should provide cheap electricity, low taxes and easy loans to the industries, so that they can compete with the industries of other countries.
India and (EU) signed the FTA on 27 January. The agreement brings together two economies that account for nearly a quarter of the world’s population, 25% of global GDP and a common market of nearly 2 billion people.
Pakistan’s lead in European market is in danger of ending.
Pakistan is upset with this deal because it had an edge over India in the European market for a long time. The reason for this was the EU’s GSP Plus scheme. Under this scheme, Pakistan had the facility to send about 66% of its products to Europe without tax.
This included goods like textiles and readymade clothes. At the same time, India had to pay 9 to 12% tax on similar goods. Despite this, Pakistan’s textile export stood at $6.2 billion, while India’s textile export was $5.6 billion.
Now this free trade agreement between India and EU, which is being called ‘Mother of All Deals’, gives India a big market in Europe without tax. This almost eliminates Pakistan’s advantage.
Along with this, Pakistan’s GSP Plus facility, which it got in 2014, is going to end in December 2027. If this is not taken forward, then this special trade facility that Pakistan gets in Europe may end completely.
EU is Pakistan’s biggest export market
EU is Pakistan’s biggest export market. In such a situation, Pakistan’s business class fears that after this agreement it may lose its hold in the European market and competition with other countries will become more difficult.
Kamran Arshad, head of All Pakistan Textile Mills Association, said that India has now become much more competitive in the European market. Pakistan’s GSP Plus lead in many sectors has ended.
FPCCI Vice President Saqib Faiyaz Magoon said that as soon as India gets tax-free access to the EU, Pakistan’s advantage will end and its exports may suffer huge losses. He said that once the market gets out of hand, it is very difficult to get it back.
Pakistan said- GSP Plus scheme is also beneficial for EU
Pakistan Foreign Ministry spokesperson Tahir Andrabi said that the GSP Plus scheme has been beneficial for both Pakistan and the EU. Through this, Europe has been getting a continuous supply of cheap clothes and readymade goods.
He said that the issue of GSP Plus was raised in the strategic dialogue held last year and subsequently it has been discussed in several meetings with the EU and its member countries. Pakistan is continuously raising this matter with the EU headquarters in Brussels and individual member countries.
After the implementation of this agreement, about 95% of India’s labor based products will get tax free access to the EU. At the same time, luxury cars and wine coming to India from Europe will also become cheaper.
India-European Union trade deal after 18 years
The FTA was signed between India and the European Union (EU) on January 27 after 18 years of long negotiations. The leaders of India and the European Union announced this during the 16th India-EU Summit on Tuesday.
According to news agency PTI, this agreement is likely to be implemented in 2027. After this deal, the tax on European cars like BMW and Mercedes imported into India will be reduced from 110% to 10%.
Apart from this, tax on liquor and wine coming from Europe to India may be reduced. Currently, there is a 150% tariff on liquor from European countries. This will be reduced to 20–30%. Read the full news…
Mercedes-BMW imported cars will be cheaper in India
Now cars imported from Europe will become cheaper in India. The Indian government has reduced the import duty on cars coming from Europe from 110% to 10%.
However, the government has set an annual limit of 2.5 lakh vehicles for this. This decision is part of the free trade agreement between India and the European Union.
However, in India, most of the popular cars of Mercedes-Benz and BMW are already manufactured through local assembly. That means the parts are imported and assembled here. Import duty on these is only 15-16.5%, hence there will be no major change in their price due to FTA with EU. Read the full news…
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