India and EU Finalise FTA
Context:
After nearly two decades of negotiations starting in 2007, India and the European Union (EU) have sealed a landmark Free Trade Agreement (FTA), often termed the "Mother of all deals", that will see the EU drop tariffs on 99.5% of Indian exports to the 27-nation bloc.
India has given tari concessions on 97.5% of imports from the EU, with European wines and luxury cars
Key Benefits for India:
Market Access:
India has gained tariff reductions across 97% of tariff lines, covering 99.5% of trade value.
Zero Duty:
90.7% of India's exports will see duties eliminated entirely on day one.
This benefits labour-intensive sectors like textiles, apparel, leather, footwear, tea, coffee, spices, sports goods, and gems & jewellery.
Indian sectors that primarily exports to EU will see zero duties: marine products, chemicals, plastic and rubber items, leather footwear, textiles and apparel, base metals, gems and jewellery, etc.
Services:
The EU has agreed to commitments across 144 services sub-sectors, including IT/ITeS, professional services, and education.
Mobility:
The deal ensures easier movement for skilled Indian workers to work within the 27-country bloc.
Key Benefits for EU:
Overall India offers duty elimination/reduction on 92.1% of tariff lines, covering 97.5% of EU exports to India.
Tariffs on cars will drop significantly from 110% to 10% (under a quota of 250,000 vehicles).
Duties on spirits will be cut to 40%, and wines will see reductions from 100% to 20-30%.
Sectors like machinery, aircraft, chemicals, and pharmaceuticals will enjoy duty-free access.
Sensitive Sectors Excluded:
Both sides, however, made sure to exclude their respective sensitive sec tors:
India’s strategic agricultural and dairy sectors remain protected.
EU will maintain its current tariffs on beef, sugar, rice, chicken meat, milk powder, honey, bananas, soft wheat, garlic, and ethanol.
"Towards 2030: India-EU Joint Comprehensive Strategic Agenda"
The Joint Comprehensive Strategic Agenda is aimed at accelerating progress across five key pillars:
prosperity and sustainability,
technology and innovation,
security and defence,
connectivity and global challenges,
enabling factors such as skills, mobility, business and people-to-people ties.
India-EU Trade and Technology Council (TTC), a high level coordination platform to address key trade, technology and economic security issues, as the cornerstone of their technology partnership.