India and the European Union have agreed on a free trade agreement, capping nearly two decades of negotiations at a time of strained ties with the US.
“Europe and India are making history today. We have concluded the mother of all deals,” European Commission President Ursula von der Leyen wrote on X, formerly Twitter, on Tuesday. “We have created a free trade zone of two billion people, with both sides set to benefit. This is only the beginning. We will grow our strategic relationship to be even stronger.”
India-EU trade deal: Key highlights
The India-EU trade deal will reduce or eliminate tariff on 96.6% of EU goods, saving up to €4 billion in import duty — so much so that the FTA is expected to double EU exports to India by 2032. Here’s a look at the key announcements:
- Import duty on European cars will gradually go down to 10%, with quota of 2.5 lakh cars per year.
- Tariffs of up 44% on machinery, 22% on chemicals, 11% on pharmaceuticals will be mostly eliminated.
- Tariffs eliminated on fruit juice, processed foods, olive oil, margarine, vegetable oils from the EU.
- Tariffs on EU’s aircraft and spacecraft to be elimited for almost all products.
- Tariffs on 90% of EU’s optical, medical, surgical equipment eliminated.
- Tariff on European beer cut to 50%, spirits to 40% and wine to 20%-30%.
- Tariff on EU chemicals eliminated for almost all products.
In the services space, EU service providers will get “privileged access” to India in key sectors such as financial services and maritime.
The India-EU trade deal also includes a mobility pact that allows movement of students and workers into Europe, as well as a defence partnership.
Separately, the European Union has pledged €500 million over the two years to help India’s efforts to cut greenhouse gas emissions.
This is a developing story. More to come.
