New Delhi, February 6 (ANI): External Affairs Minister S. Jaishankar on Friday described the India-EU Free Trade Agreement as a “game changing” development while speaking at the inaugural India-EU Forum organised by the Ananta Centre in partnership with the Ministry of External Affairs. In a post on X he said the FTA has been a game changer for the partnership and flagged other areas with great potential, including security, defence, climate, technology and talent flows. He added that he hoped the forum would promote more conversations and greater convergences between India and the EU. (https://x.com/ANI/status/2019642620197179584?s=20)
The remarks follow the finalisation and signing of the landmark India-EU FTA on January 27. Designed as a modern, rules-based trade partnership, the agreement aims to address contemporary global challenges and deepen market integration between India (the world’s fourth-largest economy) and the EU (the second-largest), covering a combined market estimated at over Rs 2,091.6 lakh crore (USD 24 trillion).
Key trade and market outcomes
– The FTA delivers preferential market access for more than 99% of India’s exports by trade value while preserving policy space for sensitive sectors and reinforcing developmental priorities. India has secured preferential access across 97% of tariff lines, covering 99.5% of trade value.
– Bilateral merchandise trade in 2024-25 stood at about Rs 11.5 lakh crore (USD 136.54 billion), with India exporting roughly Rs 6.4 lakh crore (USD 75.85 billion) to the EU. Trade in services reached Rs 7.2 lakh crore (USD 83.10 billion) in 2024.
– 70.4% of tariff lines, covering 90.7% of India’s exports, will see immediate duty elimination in labour-intensive sectors such as textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery, and certain marine products.
– Another 20.3% of tariff lines will reach zero duty over three to five years, while 6.1% will receive tariff reductions or tariff rate quotas (TRQs) for items including cars, steel, and certain shrimp/prawn products.
– Key employment-generating sectors currently facing EU duties of 4–26%—together worth over Rs 2.87 lakh crore (USD 33 billion) in exports—will enter the EU market at zero duty from the FTA’s entry into force.
– India is offering duty elimination or reduction on 92.1% of its tariff lines, covering 97.5% of EU exports; 49.6% will see immediate elimination and 39.5% phased out over five, seven and ten years.
Agriculture, rules of origin, and MSME support
– The FTA is expected to boost agriculture and processed foods with preferential access for tea, coffee, spices, grapes, gherkins, cucumbers, dried onion, and fresh fruits and vegetables, while protecting sensitive items such as dairy, cereals, poultry, and soymeal.
– Product-specific rules of origin are aligned with existing supply chains, allow self-certification, and include special flexibilities for MSMEs. The agreement also includes quotas for shrimps, prawns and downstream aluminium products.
Services, mobility and professional access
– The EU has offered broader commitments across 144 service sub-sectors including IT/ITeS, professional services, education and business services. India has opened 102 sub-sectors covering EU priorities such as telecommunications, maritime, financial and environmental services.
– The FTA establishes a mobility framework for Indian professionals—covering intra-corporate transferees, contractual service suppliers and independent professionals across dozens of sub-sectors—and includes commitments to conclude social security agreements within five years.
– Indian traditional medicine practitioners (AYUSH) will gain greater access to provide services in EU member states, with future openness envisaged for wellness centres and clinics.
Standards, IP and sectoral gains
– The agreement strengthens intellectual property protections in line with TRIPS, recognises India’s Traditional Knowledge Digital Library (TKDL), and enhances cooperation on sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) measures through digitisation and mutual recognition.
– Sectoral gains are expected across engineering goods, marine products, leather and footwear, gems and jewellery, textiles and apparel, plastics and rubber, chemicals, medical instruments and minerals, with tariff elimination or sharp reductions unlocking access to major EU import markets and creating substantial employment opportunities in India.
Outlook
The India-EU FTA is framed as transforming bilateral relations into a modern, multifaceted partnership that offers a stable, predictable environment for exporters, helps Indian businesses—including MSMEs—plan long-term investments and integrate into European value chains, and positions both sides as preferred economic partners. Jaishankar’s address at the forum underlined the potential to build on this economic foundation through broader convergences in security, defence, climate, technology and talent flows. (ANI)
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