India-EU free trade deal cannot include dairy sector, trade minister says

India and the European Union will be unable to strike a free-trade deal if the bloc insists on getting access to the Asian giant’s dairy industry, Trade Minister Piyush Goyal said on Friday.

The two sides agreed in 2022 to relaunch talks on a free-trade pact, initially aiming to wrap them up by the end of 2023, but progress has been slow, with India blaming the EU for what it called “irrational” standards as one reason.

A trade deal could be concluded swiftly if sensitivities were respected on both sides, Goyal told the Asia-Pacific conference of German business in the Indian capital, attended by German Economy Minister Robert Habeck.

Agriculture was the “most problematic” area in the deal talks, Habeck had said on Thursday, suggesting that it would be better for the two sides to focus first on the industrial sector.

The comments came as German Chancellor Olaf Scholz leads a high-level delegation to New Delhi, betting that greater access to the vast Indian market can reduce Germany’s reliance on China.