NEW DELHI (Web News) – 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 negotiations.
EU chiefs and Prime Minister Narendra Modi hope the pact will help shield against challenges from the world’s two leading economies, the United States and China.
The agreement will cut or eliminate tariffs on almost 97% of European exports, saving up to €4 billion ($4.75 billion) annually in duties, the 27-nation bloc said.
“A 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 Costa.
“This deal will bring many opportunities for India’s 1.4 billion and many millions of people of the EU,” Modi said, adding the agreement “represents about 25% of global GDP, and one-third of global trade”.
The EU has eyed India — the world’s most populous nation — as an important market for the future.
“Europe 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 India۔s Republic Day parade.
“We have created a free trade zone of two billion people, with both sides set to benefit.”
EU officials said the deal was the most ambitious India had ever signed, and European companies would benefit from the so-called “first mover advantage”.
Europe’s key agricultural, automotive and service sectors stand to gain.
New Delhi sees the European bloc as an important source of much-needed technology and investment to rapidly upscale its infrastructure and create millions of new jobs.
Highest access
Bilateral trade in goods reached €120 billion ($139 billion) in 2024, an increase of nearly 90% over the past decade, according to EU figures, with a further €60 billion ($69 billion) in trade in services.
Under the agreement, India is expected to ease market access for key European products.
Tariffs on cars will be gradually lowered from a top rate of 110% to as low as 10%, while duties on wines progressively go down from 150% to as low as 20%.
Currently at 50%, tariffs on processed foods — including pasta and chocolate — will be eliminated, according to the EU.
