The massive reduction in tariffs is expected to be a boon for European exporters who will likely save €4 billion per year in levies and double EU trade exports to India by 2032
India and the EU have reached the
“mother of all deals” in a historic feat achieved by both sides by creating a free trade zone under the Free Trade Agreement (FTA). Under the agreement, tariffs on 96.6 per cent of the value of EU goods exports to India will be eliminated or significantly slashed.
The massive reduction in tariffs is expected to be a boon for European exporters who will likely save €4 billion per year in levies and double EU trade exports to India by 2032.
European Union Chief Ursula Von der Leyen is in New Delhi with European Council President Antonio Costa, EU foreign minister Kaja Kallas, and other top EU officials to attend the India-EU Summit. She and Costa were also the chief guests at the Republic Day celebrations on Monday.
What will get cheaper?
The deal, touted as the biggest in India’s and the EU’s partnership, will make European goods, particularly food and energy products, much cheaper for Indian buyers.
The tariff reduction would slash the prices of European fruit juices, processed foods, olive oil, margarine, and other vegetable oils. Along with this, duties on European liquor, which are currently as high as 150 per cent, will be reduced to 40 per cent.
The deal will also scrap tariffs of up to 44 per cent on machinery, 22 per cent on chemicals and 11 per cent on pharmaceuticals.
What has Von der Leyen said?
von der Leyen on Tuesday announced that India and the European Union (EU) have reached the much-awaited trade deal.
Von der Leyen said that the
India-EU Free Trade Agreement (FTA) has created a free trade zone of 2 billion people in a win-win arrangement for both sides.
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In a statement, von der Leyen further said that the conclusion of the trade deal was only the beginning and that “we will grow our strategic relationship to be even stronger”.
At the India-EU Summit, von der Leyen and Prime Minister Narendra Modi are set to formally announce the finalisation of the India-EU FTA, a security and defence partnership, and a mobility agreement. They are also set to adopt the 2026-2030 joint comprehensive strategic agenda for the India-EU relationship.
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