INDIA SEALS LANDMARK EU TRADE PACT

India on Tuesday concluded its most ambitious free trade agreement with the European Union, marking a major milestone in bilateral economic ties.

- ABHINANDAN MISHRA

Prime Minister Narendra Modi on Tuesday announced the conclusion of the India-European Union free trade agreement at the India-EU Summit, held in the presence of Ursula von der Leyen, President of the European Commission, and Ant6nio Costa, President of the European Council. The announcement marked the political conclusion of negotiations between India and the European Union, with both sides stating that the legal text will now undergo technical scrutiny and ratification.

Officials on both sides have indicated that the agreement is expected to come into force in 2027, subject to approvals in India and across EU member states.

‘The agreement is being described by the governments as the “mother of all deals” because of the scale of trade and economic exposure involved. India’s goods trade with the EU currently stands at about USD 136 billion a year, with exports of roughly USD 76 billion and imports of about USD 60 billion. Including services, total bilateral trading partner as a bloc and accounting for nearly 17-18 per cent of India's total exports.

None of India's recent free trade agreements operate at this base. Goods trade with the UAE is around USD 85-90 billion, with Australia about USD 25-30 billion, and with the EFTA countries combined under USD 20 billion. The size of the partner economy further distinguishes the agreement. The European Union represents a USD 17 trillion economy spanning 27 countries and a population of about 450 million, with per capita incomes far higher than those of India's other FTA partners. India has not previously concluded a trade agreement with an economic bloc of comparable scale, regulatory integration, or purchasing power.