India and European Union Finalise Landmark Free Trade Agreement After Two Decades of Negotiations
India and the European Union (EU) have concluded a historic Free Trade Agreement (FTA) after nearly 20 years of talks. The deal aims to double exports to India and eliminate tariffs on 99.5% of Indian exports to the 27-nation bloc. Key sectors benefiting include textiles, leather, gems, and jewelry. In return, India has granted tariff concessions on 97.5% of imports from the EU, making European wines and luxury cars significantly cheaper. The agreement also includes a Security and Defence Partnership and a memorandum on mobility for Indian professionals and students, marking a major shift in bilateral relations.
Key Points
- The FTA eliminates duties on 99.5% of Indian exports and 97.5% of EU imports into India.
- Key Indian labor-intensive sectors like textiles, leather, and footwear will gain zero-duty access to the EU market.
- The deal includes a Security and Defence Partnership to enhance cooperation in maritime security and cyber-security.
- A separate memorandum on mobility aims to facilitate the movement of Indian professionals and students to the EU.
Exam Facts
- Negotiations for the FTA originally started in 2007, were suspended in 2013, and relaunched in 2022.
- The deal targets a reduction in tariffs for European wines from 150% to 20-30% and cars from 110% to 10%.
- The agreement covers 144 service sub-sectors for the EU and 102 for India.
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