“This is a historic day,” European Commission President Ursula von der Leyen said Tuesday at an EU-India summit in New Delhi alongside Indian Prime Minister Narendra Modi. “We created a free trade zone for 2 billion people. It’s a signal to the world that rules-based cooperation still delivers.”
The agreement marks the most extensive trade liberalization India has ever signed with another country, according to the European Commission. It includes a phased reduction of import duties on nearly 97% of EU goods entering India, potentially doubling current EU exports, which totaled €75 billion in 2024.
Tariffs on European cars, currently at 110%, will fall to 10%, while duties on car parts will be fully eliminated over five to ten years. Other reductions include:
- Machinery (44% duties), chemicals (22%), and pharmaceuticals (11%) — mostly eliminated
- Agricultural products such as bread and sweets — 50% tariffs removed
- Olive oil — duties reduced from 45% to 0% within five years
- Vodka — from 150% to 40%
- Wine — from 150% to 75%, later to 20%
- Beer — from 110% to 50%; non-alcoholic beer from 55% to 0%
India will also lower tariffs on European food and alcohol imports, while the EU will introduce import quotas for selected Indian goods such as goat meat, corn, grapes, dried onions, and molasses-based rum. Sensitive EU products including beef, poultry, powdered milk, rice, and sugar remain excluded.
The deal includes a safeguard mechanism to protect both markets from potential disruptions due to sudden import surges.
The agreement still requires legal review and translation into all EU languages before being submitted to member states and the European Parliament. It must also be ratified by India. A similar agreement with Mercosur took over a year to finalize after talks ended.
Separately on Tuesday, the EU and India signed a defense and security partnership aimed at boosting cooperation in maritime security, cybersecurity, counterterrorism, and arms industry collaboration.
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Source: PAP