New Delhi: After nearly 20 years of negotiation, India and the EU finally inked the long-awaited India-EU Free Trade agreement. The deal was signed at Hyderabad House in the presence of Prime Minister Modi, European Commission President Ursula von der Leyen and European Council President Antonio Costa.
But while the deal is signed, its ramifications are not likely to come into place before it is vetted by the European Parliament and EU member nations, and the same process holds true for India. Nevertheless, diplomats say the signing of such a deal showcases political intent a fact that Prime Minister Modi stressed that India and the EU has concluded the “mother of all deals” on the sidelines of the 16th India-EU summit. “This agreement will bring major opportunities for the public in India and Europe. This is a perfect example of a partnership between two major economies of the world...This agreement represents 25% of the global GDP and one-third of global trade. Along with trade, the agreement is also reflective of our [India and European Union] shared commitment for democracy and rule of law.”
Stating that the India-EU FTA would complement the India-UK FTA and the Asia Pacific Trade Agreement (APTA), prime minister Modi added that the agreement would particularly benefit those working in the textile, gems and jewelry, the leather and shoe sectors. “The trade will give a boost to the manufacturing sector while the services sector will also expand further.” On the issue of trade, the prime minister stated the IndiaEU FTA would “strengthen the confidence of every business and investor investing in India.”
While the India-FTA agreement is yet to be passed as it has to first go through a “legal scrubbing”, the expectations from both sides are high. The economic think tank, Global Trade and Research Initiative (GTRI) stated on Sunday that the FTA would allow market access to all 27 member states, reduce tariffs on key exports such as garments, pharmaceuticals, steel, petroleum products, and machinery, and enable Indian firms to better absorb shocks arising from higher US tariffs. “For India, the FTA offers access to one of the world’s richest and most stable markets — the European Union, with a GDP of roughly €18-22 trillion and 450 million high-income consumers — at a time when global trade is turning more protectionist,” said GTRI chairman Ajay Srivastava.
On the EU side the mood was equally jubilant. European Commission president Ursula von der Leyen the trade would “integrate our supply chain and strengthen our joint manufacturing power” and would create “good jobs for millions of workers here in India and in Europe”.
The India-EU FTA comes under the framework of the India-European Comprehensive Strategic Agenda 2030. Under this framework the two sides signed 13 MoUs among which included an India-EU Strategic Partnership, India-EU Security of Information Agreement, cooperation on disaster risk management, agreement on the constitution of a green hydrogen task force, India-EU Cooperation on Mobility and an MoU between the Reserve Bank of India and the European Securities and Markets Authority
