The India-EU free trade agreement – which European Commission President Ursula von der Leyen called “the mother of all trade deals” – has been sealed, Prime Minister Narendra Modi said Tuesday afternoon as the two leaders signed a political declaration to that effect.
In a post-signing statement the PM said two of the world’s biggest democratic trading blocs – with trade valued at 180 billion Euros – had “sealed the biggest FTA in our history”.
“We have taken a lot of decisions that will help people… the India-EU trade deal is a blueprint for mutual growth,” he said, noting eight lakh Indians living in the EU would also benefit.
Earlier the PM called the agreement a ‘remarkable example of cooperation between the world’s two largest economies’ and emphasised the positive outcome for several domestic sectors, including textiles, gems and jewellery, and leather goods. “The deal represents approximately 25 per cent of global GDP and nearly one-third of global trade. It strengthens our shared commitment not only to trade but also to democracy and the rule of law,” the PM said.
The accord reached this morning marked a major breakthrough in talks that had dragged on for nearly two decades; negotiations were first launched in 2007 and dropped in 2016 over a till-then unresolved roadblock – primarily over access to India’s agricultural and dairy goods market – halted any further progress. Talks were picked up again in 2022 – amid concerns over supply chains affected by the post-COVID era and Russia’s war on Ukraine – and accelerated last year.
The FTA will lower tariffs on most consumer and industrial goods traded between India and EU members, although it is expected to exclude some agricultural products. In exchange, the EU will also get enhanced market access for its automobile exports, subject to a cap.