Deal expected to ease access for European cars and wine, in return for Indian exports of textiles, gems and pharmaceuticals<\/b>
\nDeal expected to ease access for European cars and wine, in return for Indian exports of textiles, gems and pharmaceuticals
India and the EU have finalised a landmark free trade agreement, which the European Commission president, Ursula von der Leyen, hailed as the \u201cmother of all deals\u201d.
The agreement comes after almost two decades of on-off negotiations between India and the EU, which vastly accelerated in the past six months and were finally concluded late on Monday night.
The deal is expected to open up India\u2019s vast and traditionally tightly guarded market to the 27 nations in the bloc, with a focus on manufacturing and the services sector. It is expected to ease market access for key European products, including cars and wine, in return for easier exports of textiles, gems and pharmaceuticals.
The agreement is expected to double EU exports to India by 2032 by eliminating or cutting tariffs in 96.6% of traded goods by value, and would lead to savings of \u20ac4bn (\u00a33.5bn) in duties for European companies, the EU said.
\u201cEurope and India are making history today,\u201d von der Leyen said in a statement after landing in Delhi, where she met the Indian prime minister, Narendra Modi, on Tuesday. \u201cWe have concluded the mother of all deals. We have created a free trade zone of two billion people, with both sides set to benefit.\u201d
Von der Leyen had previously stated that she expected exports to India to double after the deal, with the EU granted unprecedented access to the previously heavily protected Indian market.
India, the world\u2019s largest country with a population of 1.4 billion, is also one of the world\u2019s fastest-growing economies and is on track to become its fourth-largest economy this year, according to the International Monetary Fund.
The deal is one of the most comprehensive that India has ever signed and Modi emphasised that it represented about a third of global trade, calling it the \u201cbiggest free trade deal in history\u201d.
\u201cThis agreement has brought massive opportunities for 1.4 billion Indians and millions of people in European countries,\u201d he said. \u201cIt has become a wonderful example of synergy between two of the world\u2019s major economies.\u201d
The deal will lead to Delhi slashing tariffs on cars to 10% over five years from as high as 110%, according to an EU statement, benefiting European carmakers such as Volkswagen, Renault, Mercedes-Benz and BMW.
Under the agreement, up to 250,000 European-made vehicles will ultimately be about to enter India at preferential duty rate, far outstripping the 37,000 limit allowed from the UK agreed in a separate deal last year.
Trade talks between the two countries began as far back as 2007 but were abandoned owing to disputes over access to cars, agriculture and dairy.
However, they were resumed again in 2022 and accelerated with gusto over the past six months in the face of heavy punitive tariffs by Donald Trump\u2019s administration in the US and joint concerns over China\u2019s monopoly over global manufacturing and the country\u2019s restrictions on key exports.
India is grappling with 50% tariffs on exports to the US and the EU is facing threats of higher tariffs over its objections to Trump\u2019s attempts to take over Greenland.
According to officials, the formal signing of the deal will take place later this year and it could come into play by early next year.<\/p>\n