Once signed, duties on 90% exports to go

Immediate duty-free entry for $33bn worth of exports to EU, with remaining levy cuts phased out over 5-10yrs; technical dialogue may allay concerns over Europe's carbon tax

- Rajeev Jayaswal

The free trade deal between India and the European Union will immediately allow duty-free access to 90.7% of Indian exports in Europe's $9.5 trillion goods and services market upon operationalisation ofthe pact The agreement is set to enhance the competitiveness of labour-intensive sectors — such as textiles, leather, tea, coffee, spices, toys, gems and jewellery, and marine products — compared to least developed countries such as Bangladesh.

Both sides described the deal as forward-looking and mutually beneficial. “Today, India has concluded the largest Free Trade Agreement in its history so far. Today is the 27th, and it's ahappy coincidence that on this very day, India is signing this FTA with the 27 countries of the European Union,” Prime Minister Narendra Modi said. Visiting European Commission President Ursula von der Leyen on Tuesday said: “Europe and India are making history today. We have concluded the mother of all deals.”

Speaking at a press conference, Union commerce minister Piyush Goyal called the pact a “robust partnership framework” that leaves “sensitive issues aside” to provide a “balanced, equitable, and fair” FTA. He noted the deal is a “win-win for all sections of the industry” on both sides, with India gaining “significant access” to labour-intensive sectors and European industries gaining entry into India’s “large and fastest growing” economy in hi-tech areas.

“This agreement covers almost 99% of the total exports that are sent from India to the European Union and about 97%-plus of the total exports from the European Union to India,” Goyal said, adding that this reflects the “strength and depth” of the agreement.