<p class="bodytext">With India and the European Union (EU) signing the long-awaited trade agreement, the decks are now cleared for an expansive trade zone that covers around two billion people. Negotiations on the “mother of all deals” began almost two decades ago; the recent acceleration may have been a result of Donald Trump’s tariffs that impacted trade relations of both the European bloc and India with the United States. The deal sends a signal to Trump at a time when India is holding talks with the US on a trade agreement. In European Commission President Ursula von der Leyen’s statement that trade is “increasingly weaponised”, there may be a reference to the global disruptions caused by Trump’s trade policies. The agreement presents a win-win situation for both camps as they try to offset the fallout of these disruptions.</p>.<p class="bodytext">The deal is expected to double the total value of goods the EU exports to India. It could give a $3-5 billion boost to Indian exports to the EU in the near term. In 2024-25, the bilateral trade was worth about $137 billion. India exported goods worth $75.85 billion, while the import value stood at $60.68 billion. Both sides have large economies, together accounting for about 25% of the global gross domestic product and a third of global trade. The EU will liberalise tariffs on 99.5% of Indian imports, and India will offer 92% of its tariff lines, covering 97.5% of the EU exports. Most of India’s tariffs on machines, chemicals, and drugs are set to be eliminated. European cars, wines, medical devices, and machinery will become cheaper in India. Garment exports and the movement of service professionals from India to the EU will get a boost. India has taken care not to provide concessions in the sensitive dairy and farm sectors. The agreement will get operationalised in about a year after the due legislative procedures, even as challenges – including the EU’s stringent environmental regulations – remain.</p>.<p class="bodytext">While the trade deal was the most important outcome from the India-EU summit, other key collaborations were also formalised at the event. The India-EU strategic partnership will improve cooperation in defence and security. Agreements to collaborate in other domains, including mobility, were signed. Together, these new partnerships will build upon existing cooperation in clean energy and climate action, digital technologies, space, and connectivity. Coming in the wake of Trump’s plans for the US to acquire Greenland, and opposition from his European allies, the India-EU agreement also carries importance as a position and safeguard against economic coercion.</p>
<p class="bodytext">With India and the European Union (EU) signing the long-awaited trade agreement, the decks are now cleared for an expansive trade zone that covers around two billion people. Negotiations on the “mother of all deals” began almost two decades ago; the recent acceleration may have been a result of Donald Trump’s tariffs that impacted trade relations of both the European bloc and India with the United States. The deal sends a signal to Trump at a time when India is holding talks with the US on a trade agreement. In European Commission President Ursula von der Leyen’s statement that trade is “increasingly weaponised”, there may be a reference to the global disruptions caused by Trump’s trade policies. The agreement presents a win-win situation for both camps as they try to offset the fallout of these disruptions.</p>.<p class="bodytext">The deal is expected to double the total value of goods the EU exports to India. It could give a $3-5 billion boost to Indian exports to the EU in the near term. In 2024-25, the bilateral trade was worth about $137 billion. India exported goods worth $75.85 billion, while the import value stood at $60.68 billion. Both sides have large economies, together accounting for about 25% of the global gross domestic product and a third of global trade. The EU will liberalise tariffs on 99.5% of Indian imports, and India will offer 92% of its tariff lines, covering 97.5% of the EU exports. Most of India’s tariffs on machines, chemicals, and drugs are set to be eliminated. European cars, wines, medical devices, and machinery will become cheaper in India. Garment exports and the movement of service professionals from India to the EU will get a boost. India has taken care not to provide concessions in the sensitive dairy and farm sectors. The agreement will get operationalised in about a year after the due legislative procedures, even as challenges – including the EU’s stringent environmental regulations – remain.</p>.<p class="bodytext">While the trade deal was the most important outcome from the India-EU summit, other key collaborations were also formalised at the event. The India-EU strategic partnership will improve cooperation in defence and security. Agreements to collaborate in other domains, including mobility, were signed. Together, these new partnerships will build upon existing cooperation in clean energy and climate action, digital technologies, space, and connectivity. Coming in the wake of Trump’s plans for the US to acquire Greenland, and opposition from his European allies, the India-EU agreement also carries importance as a position and safeguard against economic coercion.</p>
