Source: Reuters (as reported in multiple outlets)
India and the European Union (EU) have finalized a historic Free Trade Agreement (FTA) after nearly two decades of negotiations, in a deal expected to reshape one of the world’s largest economic partnerships. The pact cuts or eliminates tariffs on the majority of goods traded between India and the EU, aiming to significantly boost bilateral commerce and reduce dependence on other global markets.
Key points of the deal include:
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Tariff reductions: Tariffs on about 96.6% of EU goods by value entering India will be either eliminated or sharply reduced, saving European companies around €4 billion (approx $4.75 billion) annually.
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Market access for Indian products: India will receive reduced or zero tariffs on around 99.5% of its exports to the EU over a phased period of several years, including on textiles, marine products, chemicals, and gems and jewellery.
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Automobile tariffs: India will cut tariffs on European cars from very high levels — in some cases over 100% — to about 10% over a five-year span, under a quota system that applies to roughly 250,000 vehicles per year.
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Exclusions: Some sensitive agricultural items such as dairy, rice, and certain meats are not part of the tariff reduction plan to protect domestic sectors.
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Support and climate pledge: The EU pledged €500 million in assistance to help India reduce greenhouse gas emissions and meet climate goals tied to future trade cooperation.
Leaders from both sides called the agreement the “mother of all deals” given its size and potential impact. It still needs to be ratified by the European Parliament, EU member states, and the Indian cabinet before it is put into effect, likely within the next year.