New Delhi, India. India and the European Union signed a long-delayed trade deal on Tuesday that will slash tariffs on most goods to boost two-way trade and reduce reliance on the United States amid growing global trade tensions.
Tariff cuts and projected trade impact
The EU said the deal is expected to double EU exports to India by 2032 by eliminating or reducing tariffs in 96.6% of traded goods by value, leading to savings of 4 billion euros ($4.75 billion) in duties for European companies.
India’s trade ministry said the EU will cut tariffs on 99.5% of goods imported from India over seven years, with tariffs to be cut to zero on Indian marine goods, leather and textile products, chemicals, rubber, base metals and gems and jewellery.
Agriculture exclusions
India and the EU said agriculture-related items including soya, beef, sugar, rice and dairy have been excluded from the trade deal.
Statements from leaders
Indian Prime Minister Narendra Modi said, “Yesterday, a big agreement was signed between the European Union and India.”
Modi added, “People around the world are calling this the mother of all deals. This agreement will bring major opportunities for the 1.4 billion people of India and the millions of people in Europe.”
European Commission President Ursula von der Leyen said, “Europe and India are making history today. This is only the beginning.”
Context and recent trade activity
The two-decade-long EU–India trade talks gained momentum after Washington imposed a 50% tariff on some Indian goods, and as U.S. allies pushed back against President Donald Trump’s tariff threats and his bid to take over Greenland.
Canada’s Prime Minister Mark Carney, in a speech that received a standing ovation in Davos last week, urged middle powers to come together to avoid becoming victimised. The article said Carney is planning to visit India to sign deals on uranium, energy and minerals, after striking a deal recently with China.
Before signing the deal with New Delhi, the EU agreed a pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland. During the same period, New Delhi finalised pacts with Britain, New Zealand and Oman.
How do you expect the EU–India trade deal to affect prices and product availability where you live?
