India-EU Free Trade Agreement (FTA) & Disagreement Over Food Safety Rules

GS 2 – International Relations

Context

India and the European Union (EU) are currently negotiating a comprehensive Free Trade Agreement (FTA), formally known as the India-EU Trade and Investment Agreement. However, negotiations have stalled, primarily due to differences over food safety standards, particularly those governed by Sanitary and Phytosanitary (SPS) measures.

Sanitary and Phytosanitary (SPS) Measures

• SPS measures are governed by the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, which came into effect in 1995.
• These rules allow countries to set their own food safety and animal/plant health standards, provided:
  • They are science-based
  • Not arbitrary or discriminatory
  • Applied only as necessary to protect life or health
  • Based on risk assessments and implemented consistently

India’s Concerns with EU SPS Norms

• The EU’s SPS regulations are often stricter than international (Codex) standards, causing frequent rejections of Indian exports.
• Example: The use of methyl bromide fumigation in Indian plant products is restricted by the EU.
• Aflatoxin Limits:
  • EU allows:
    • Max 2 µg/kg for aflatoxin B1
    • 4 µg/kg for total aflatoxins
  • Codex Alimentarius (WHO-FAO standard): 15 µg/kg for total aflatoxins in peanuts
• These stricter standards have increased the compliance burden for Indian exporters and disrupted trade flows.

Impact on India-EU Trade

• The EU is a key export destination for Indian agricultural goods such as coffee, tea, spices, and rice.
• Despite the potential, India’s agri-exports to the EU have seen marginal growth, from $3.02 billion (FY19) to $4.54 billion (FY25).
• The stringent EU SPS norms remain a major non-tariff barrier hindering further trade expansion.

What are Aflatoxins?

• Aflatoxins are toxic compounds produced by fungi (especially Aspergillus species) found on food crops like peanuts, maize, rice, and tree nuts, particularly in warm, humid climates.
• Health risks:
  • Liver cancer
  • Immune suppression
  • Growth retardation
  • Acute poisoning
• Significance: Managing aflatoxin levels is critical for meeting export standards and ensuring public health.