The words ‘landmark deal’ were apt for the free trade agreement between India and the European Union. For those who love numbers, the pact is worth €4 billion ($4.75 billion) in annual savings on duties. The deal comes after nearly two decades of talks. Negotiations began in 2007, stalled in 2013, and formally restarted in July 2022.
The deal was inked when Prime Minister Narendra Modi hosted European Commission President Ursula von der Leyen and European Council President Antonio Costa in the capital.
The deals cover trade, defence, security, climate change, and critical technologies. Together, India and the EU represent nearly 25 percent of global GDP and a market of two billion people.
“Today, we have concluded the biggest free trade agreement in India’s history,” Prime Minister Modi was quoted as saing.
He added that it will give Indian farmers and industries greater access to European markets. He called the agreements “another decisive chapter” in the relationship between two major democracies. This came after the EU leaders took part in India’s Republic Day celebrations.
Von der Leyen called the FTA the “mother of all” trade deals. She said it comes as India and the EU work together to navigate geopolitical turbulence and trade disruptions. She also described it as “the tale of two giants — the world’s second and fourth largest economies — which chose partnership in a true win-win fashion.”
The agreement will cut or remove tariffs on almost 97 percent of European exports to India. Car duties will fall from 110 percent to as low as 10 percent. Motor vehicle duties apply under a quota of 250,000 vehicles. That is six times larger than the 37,000-unit quota India gave the UK last year. Wine tariffs will drop from 150 percent to 20 percent for premium wines and 30 percent for medium-range wines. Processed foods such as pasta and chocolate will see tariffs eliminated entirely. Beer duties will fall from 110 percent to 50 percent.
Tariffs on chemicals, machinery, electrical equipment, aircraft, and spacecraft will also be gradually reduced.
Experts said the deal will boost Indian exports in labour-intensive sectors. He added it will partly offset the impact of US tariffs. European products will also gain immediate price advantages in India.
Almost all Indian exports would get preferential access to the EU, claimed reports. This includes textiles, leather, marine products, handicrafts, and gems and jewellery.
Commodities such as tea, coffee, spices, and processed foods will also benefit. Sensitive sectors like dairy, cereals, poultry, soy meal, and some fruits and vegetables are protected.
Alliance in security, defence
India and the EU also signed a security and defence partnership.
This reaffirms their commitment to a rules-based international order. A separate agreement was signed to establish a framework for mobility and strategic cooperation. Defence Minister Rajnath Singh discussed a draft security and defence partnership with EU Vice-President Kaja Kallas. Topics included maritime security, cyber threats, and future-ready defence capabilities, according to reports.
The summit focused on trade, defence, climate change, and critical technologies. Analysts said the partnership comes as Europe seeks to reduce dependence on the US and China. It also expands ties with other regions. The formal signing is expected later this year after approval by the European Parliament and European Council.
Bilateral merchandise trade between India and the EU reached $136 billion in 2024-25, nearly doubling over a decade.
In recent years, India signed trade agreements with the UK, Oman, New Zealand, Australia, and the European Free Trade Association bloc (Switzerland, Norway, Iceland, Liechtenstein). The EU recently signed a deal with Mercosur after 25 years of negotiations.
European Council President Antonio Luis Santos da Costa shared a light moment. He showed his OCI (Overseas Citizen of India) card. He spoke about his Goan roots.
Also Read: Successful India Makes World More Stable and Secure, Believes EU Chief https://www.vibesofindia.com/successful-india-makes-world-more-stable-and-secure-believes-eu-chief/
