EU–India seal historic trade pact creating market of two billion people

India and the European Union announced Tuesday the mother of all deals a huge trade pact to create a market of two billion people reached after two decades of negotiationsEU chiefs and Prime Minister Narendra Modi hope the pact will help shield against challenges from the worlds two leading economies the United States and ChinaThe agreement will cut or eliminate tariffs on almost 97 percent of European exports saving up to 4 billion euros 475 billion annually in duties the 27nation bloc saidA mother of all deals Modi said Tuesday in the capital New Delhi where he met with European Commission President Ursula von der Leyen and European Council President Antonio CostaThis deal will bring many opportunities for Indias 14 billion and many millions of people of the EU Modi said adding the agreement represents about 25 percent of global GDP and onethird of global tradeThe EU has eyed India the worlds most populous nation as an important market for the futureEurope and India are making history today von der Leyen said in a statement a day after she and Costa were feted as guests of honour at Indias Republic Day paradeWe have created a free trade zone of two billion people with both sides set to benefit Increasingly insecure world EU officials said the deal was the most ambitious India had ever agreed and European companies would benefit from socalled first mover advantageEuropes key agricultural automotive and service sectors stand to gainBut sensitive agricultural sectors such as beef rice and sugar whose inclusion in an earlier deal struck with South American bloc Mercosur sparked farmers anger in Europe were left out of the agreementNew Delhi sees the European bloc as an important source of muchneeded technology and investment to rapidly upscale its infrastructure and create millions of new jobsIt also includes a security partnership providing new opportunities for defence companies Modi saidWe are not only making our economies stronger we are also delivering security for our people in an increasingly insecure world von der Leyen said speaking alongside Modi after exchanging agreementsBy combining these strengths we reduce strategic dependencies at a time when trade is increasingly weaponised she addedBilateral trade in goods reached 120 billion euros 139 billion in 2024 an increase of nearly 90 percent over the past decade according to EU figures with a further 60 billion euros 69 billion in trade in servicesUnder the agreement India is expected to ease market access and European firms will get privileged access to the Indian financial services and maritime transport market the bloc said Highest level of access Tariffs on cars will be gradually lowered from a top rate of 110 percent to as low as 10 percent with a quota of 250000 vehicles while duties on wines progressively go down from 150 percent to as low as 20 percentCurrently at 50 percent tariffs on processed foods including pasta and chocolate will be eliminated according to the EUVon der Leyen said she expected exports to India to double and that the EU would gain the highest level of access ever granted to a trade partner in the traditionally protected Indian marketFor India it would boost sectors including textiles gems and jewellery and leather goods as well as the service sector Modi saidThe accord comes as both Brussels and New Delhi seek to open up markets in the face of US tariffs and Chinese export controlsThe unprecedented preferential access secured for over 99 percent of Indian exports is a gamechanger for Indian industry said Chandrajit Banerjee director general Confederation of Indian IndustryIndia is on track to become the fourthlargest economy this year according to International Monetary Fund projectionsNew Delhi which has relied on Moscow for key military hardware for decades has tried to cut its dependence on Russia in recent years by diversifying imports and pushing its own domestic manufacturing baseEurope is doing the same with regard to the United StatesThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever