Post by : Badri Ariffin

New Delhi: India and the European Union have finalized a landmark trade agreement, described as the “mother of all deals,” concluding nearly two decades of discussions. This pact aims to establish a free trade market encompassing two billion individuals and fortify economic relations.

On Tuesday, Prime Minister Narendra Modi stood alongside European Commission President Ursula von der Leyen and European Council President Antonio Costa to unveil the deal in New Delhi. Modi highlighted that the pact “accounts for about 25 percent of global GDP and one-third of global trade,” offering vast new opportunities for citizens in both regions.

The agreement will significantly reduce or eliminate tariffs on approximately 97 percent of European exports, saving the EU around 4 billion euros ($4.75 billion) annually. Essential sectors in Europe, such as agriculture, automotive, and services, will benefit from these first-mover advantages.

Tariffs on European vehicles in India will shrink from 110% to 10%, with wine duties decreasing from 150% to 20%, and processed food tariffs—covering items like pasta and chocolate—being removed entirely. European businesses will also gain preferential access to India’s financial and maritime sectors.

India anticipates growth in textiles, leather, gems and jewelry, and the service industry. Bilateral trade in goods reached 120 billion euros ($139 billion) in 2024, with services trade adding another 60 billion euros ($69 billion).

This agreement emerges as both India and the EU seek to diversify their markets amidst US tariffs and Chinese export restrictions. Discussions also encompassed initiatives for easier movement of seasonal workers, students, and skilled professionals, in addition to security and defense collaboration.

Von der Leyen characterized this deal as “a definitive choice for strategic partnership and openness,” underscoring that it provides a roadmap for a fractured global landscape.

According to the IMF, India is on track to become the fourth-largest global economy this year, while the EU views India as a vital market for investment and technological advancement.

#Global News #India News