India–EU Free Trade Agreement:
India and the European Union (EU) made history by announcing the conclusion of their long-awaited Free Trade Agreement (FTA) at the 16th India–EU Summit in New Delhi.
- Dubbed the “mother of all deals,” this breakthrough ends nearly two decades of stop-start negotiations and establishes a strategic economic corridor.
- The India–EU FTA is a comprehensive and modern trade pact designed to eliminate or significantly reduce tariffs on goods, liberalize trade in services, and enhance investment flows.
- Together, these two regions represent 25% of global GDP and nearly one-third of world trade. The agreement aims to double bilateral trade by 2032, providing a stable, rules-based framework that reduces dependence on volatile supply chains.
Key Features of the Agreement:
- The EU will provide duty-free access to over 99% of Indian exports by trade value. India will eliminate tariffs on roughly 92-97% of EU goods over a phased period.
- Zero duties on USD 33 billion worth of Indian exports including textiles, apparel, leather, gems, jewellery, and marine products.
- A quota-based system allows EU luxury carmakers (e.g., Mercedes, BMW) access to the Indian market at reduced duties (dropping from 110% to as low as 10%) while protecting domestic manufacturing.
- India gains access to 144 EU sub-sectors (IT, finance, education). A new mobility framework facilitates visas for skilled professionals, intra-corporate transferees, and even practitioners of Indian Traditional Medicine (AYUSH).
- Forward-looking provisions on the EU’s Carbon Border Adjustment Mechanism (CBAM) ensure technical support and dialogue to help Indian MSMEs comply with green standards.
- India has successfully safeguarded sensitive sectors like dairy, cereals, and poultry, which are excluded from the deal to protect local farmers.
