EU, India sealed historic free trade deal, described it as “mother of all deals”

India and the European Union on Tuesday sealed a landmark free trade agreement— billed as the “mother of all deals” — to create a market of two billion people with Prime Minister Narendra Modi and the top EU leadership unveiling a transformative agenda to leverage trade and defence in protecting the rules-based world order.

The two sides also inked two crucial pacts — one on security and defence collaboration and another on mobility of Indian talents to Europe — after Prime Minister Modi hosted EU leaders Ursula von der Leyen and Antonio Costa for summit talks amid frosty ties with the US.

The trade agreement that will account for almost a quarter of the global GDP will reduce tariffs on 99 per cent of Indian exports to the EU and cut duties on over 97 per cent of the EU’s exports to India, according to officials.

The EU estimated that the deal will cut up to four billion euros in annual tariffs for European exporters.

Indian sectors such as textiles, apparel, leather goods, handicrafts, footwear and marine products are set to gain from the FTA, while Europe is set to benefit in areas of wine, automobiles, chemicals and pharmaceuticals, among



others.

Under the provisions of the pact, the EU’s wine exports will benefit significantly as the current duties of 150 per cent will see a sharp cut and the new levies will be in the range of 20 per cent to 30 per cent.

In line with their vision for a rules-based global order, India and the 27-nation bloc also rolled out a joint comprehensive strategic agenda for the next five years and firmed up a total of 13 pacts including one on the conclusion of negotiations for the FTA.

In his remarks, Modi said the global order is undergoing “profound turbulence” and, in such a context, the partnership between India and the EU will strengthen stability in the international system.

“Today, India has concluded the largest free trade agreement in its history. It is a happy coincidence that on the 27th day of the month, India is entering into this FTA with the 27 member states of the European Union,” he said.

“This historic agreement will facilitate easier access for our farmers and small enterprises to European markets, create new opportunities in manufacturing, and further strengthen cooperation across our services sectors,” Modi said in his media statement.