Designed as a modern, rules-based trade partnership, the FTA responds to contemporary global challenges while enabling deeper market integration between the world’s 4th and 2nd largest economies.
Photo: IANS
After years of thorny negotiations, India and the European Union (EU) on Tuesday announced the conclusion of a Free Trade Agreement (FTA) that will significantly enhance bilateral trade and investment and help the two sides fight the ‘weaponisation’ of tariffs by US President Donald Trump.
In what is being called as ‘’The Mother of all deals’’, the pact was announced at a joint press conference by Prime Minister Narendra Modi, President of the European Council Antonio Costa and President of the European Commission Ursula von der Leyen at the end of the 16th India-EU Summit here.
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‘’India and Europe have taken a major step forward today. The India-EU Free Trade Agreement opens new pathways for growth, investment and strategic cooperation,’’ PM Modi said.
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He said the agreement will drive trade, investment and innovation while strengthening the strategic relationship. It reflects the shared resolve of the two sides to shape a stable, prosperous and future-ready economic relationship.
‘’Today marks a historic moment as we open a new chapter in EU-India relations – on trade, security, and people-to-people ties. Our Summit sends a clear message: in a reshaping global order, the EU and India stand together as strategic, reliable partners,’’ the President of the European Council said while the European Commission President said Europe and India are making history by concluding ‘’the mother of all deals.’’
She said the two sides have created a free trade zone of two billion people which will benefit both of them. ‘’This is only the beginning. We will grow our strategic relationship to be even stronger,’’ she added.
The conclusion of the FTA marks the culmination of a sustained dialogue lasting nearly 19 years. The two countries had first launched negotiations for the FTA in 2007. The talks were suspended in 2013 over market access for automobiles. They were relaunched in 2022. The punitive tariff regime initiated by President Trump virtually forced the two sides to conclude it at the earliest in the larger interest of global trade.
The pact will now be ratified by the European Parliament. It will come into force most likely in January next year once India also ratifies it.
‘’The announcement of the FTA today marks the culmination of years of sustained dialogue and cooperation, between India and the EU, demonstrating the political will and shared vision to deliver a balanced, modern, and rules-based economic and trade partnership,’’ a government statement said.
The historic deal is being considered a milestone in the India–EU Strategic Partnership that will drive shared prosperity, strengthen resilient and diversified supply chains, and support sustainable and inclusive growth.
The pact is one of India’s most strategic economic partnerships. Designed as a modern, rules-based trade partnership, the FTA responds to contemporary global challenges while enabling deeper market integration between the world’s 4th and 2nd largest economies.
With a combined market estimated at over Rs 2091.6 Lakh Crore ($ 24 trillion), bringing unparalleled opportunities for the two billion people of India and the EU, the FTA unlocks significant potential for trade and innovation. It delivers unprecedented market access for more than 99% of India’s export by trade value, while preserving policy space for sensitive sectors and reinforcing India’s developmental priorities.
Also read: ‘New Era’ of India-EU ties: PM Modi at Business Forum
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