India-EU trade deal: The European Union announced on Tuesday that a landmark trade deal with India will slash duties on over 90% of EU goods. This historic agreement could save member nations up to 4 billion euros in taxes on European products.
Prime Minister Narendra Modi confirmed that India and the European Union have finalised the long-awaited deal. According to an EU fact sheet, the pact is expected to double EU exports to India.
Additionally, enhanced access to the Indian services market, particularly in financial services, maritime services, and other key sectors, will open new business opportunities and foster job creation.
Which products will cost less?
With the historic trade agreement, many European imports to India will now be subject to zero tariffs.
These include machinery and electrical equipment, aircraft and spacecraft, optical, medical and surgical equipment, plastics, 22% of precious stones and metals, chemicals, motor vehicles, iron and steel, and pharmaceuticals.
Tariffs on cars will be gradually lowered from a top rate of 110% to as low as 10%, while duties on wines will be progressively reduced from 150% to 20%.
Currently at 50%, tariffs on processed foods, including pasta, bread, biscuits and chocolate, will be completely eliminated, according to the European Union.
Olive oil, margarine, and other vegetable oils will see the tariff eliminated from the current 45% level. Fruit juices and non-alcoholic beer will also be subject to zero tariffs.
‘Mother of all trades’
Dubbing it as “mother of all trades”, Prime Minister Narendra Modi on Tuesday hailed the India-EU FTA as he met European Commission President Ursula von der Leyen and European Council President Antonio Costa at the Hyderabad House in New Delhi.
“This deal will bring many opportunities for India's 1.4 billion and many millions of people of the EU,” PM Modi said, adding the agreement “represents about 25% of global GDP, and one-third of global trade”.
Calling the deal between Europe and India a ‘history’, von der Leyen said, “We have created a free trade zone of two billion people, with both sides set to benefit.”
The historic EU-India trade deal will boost key Indian sectors, including textiles, gems and jewellery, and leather goods, as well as the service sector, PM Modi said.
The pact is expected to be formally signed after legal vetting, which is likely to take about 6 months. The European Parliament will also have to ratify it.
