- India and the EU have signed the largest mutual trade agreement in history.
- The agreement reduces or eliminates tariffs on most goods, including automobiles.
- Abolished or reduced duties also apply to wine, beer, olive oil and food.
- The agreement must go through the legal process, the goal is to be valid from 2027.
India and the European Union have concluded the largest trade agreement, which in its importance exceeds all similar agreements concluded by India or the EU so far. European Commissioner for Trade and Economic Security Maroš Šefčovič said this to the TASR reporter in a telephone interview from New Delhi. According to the European Commission (EC), this is an agreement between the second and fourth largest economies in the world.
“We are talking about large dimensions. India is the largest country in the world by population, and together we create a market for almost two billion people. It is also significant in its content, because for the first time India has opened up to its trading partner in such a significant way,” stated Šefčovič.
He specified that it is a reduction of customs tariffs by 97 to 99%, which means that European exporters will save more than 4 billion euros per year on import duties to India and this will significantly help them in penetrating the huge Indian market. He considers it important from the point of view of the EU and Slovakia that thanks to this agreement, even sectors that have been almost completely closed due to high tariffs are opening up.
He pointed out that in the case of agricultural commodities, it was agreed to reduce customs duties for wines from 150 to 20%. This is a big shift when it comes to other alcoholic products that have also been burdened with high import duties. In the case of beer, it is a reduction from 110 to 50%. For products such as olive oil or processed foods, which were exported to India at tariffs of between 45% and 50%, the tariffs will be completely abolished.
“From the point of view of Slovakia, it is important information that we also managed to open the market for the automotive industry. It is an industry that is developing in India, so we agreed to respect each other’s limits of what is possible. We agreed that we will proceed through quotas.” he explained Šefčovič.
For European cars, this means that the Indian market will open up to 250,000 cars, and for the “cars in progress” category, where final assembly will take place in India, 75,000 cars will be exported annually. So far, cars in India have been taxed at 110% duty, which will be gradually reduced to 10%. At the same time, it was agreed that the import of parts to India will be duty-free.
“Today, 800,000 jobs in Europe depend on the export of goods to India. It is also important for India, because the 6,000 European companies operating in India create 3.7 million jobs.” said Šefčovič.
According to him, it is expected that thanks to the new comprehensive free trade agreement, mutual trade could double within five to six years, which would also affect the employment figures on both sides. “So we’re very optimistic about the process. I have to say that as far as the deal is concerned, there’s satisfaction on both sides.” bequeathed Šefčovič before departure from New Delhi.
He reminded that the agreement now has to go through a difficult legalization process, after which it will be translated into all official EU languages and forwarded to the other EU institutions for approval. The Indian side expressed its wish for the agreement to enter into force in 2027.
