New Delhi: In a landmark move for the global economy, India and the European Union (EU) have officially signed a long-awaited Free Trade Agreement (FTA). Prime Minister Narendra Modi announced the historic development on Tuesday, January 27, describing the pact as the “mother of all deals.”
Speaking virtually at the Indian Energy Week, the Prime Minister informed the nation that the agreement was finalized on Monday. He emphasized that this partnership unites two of the world’s most significant economies, together accounting for 25% of the global GDP and one-third of global trade.
Key Highlights of the Agreement:
- Boost for Manufacturing & Services: PM Modi highlighted that the FTA would significantly bolster domestic manufacturing and drive growth in India’s services sector. He extended congratulations to professionals in the textiles, gems and jewelry, leather, and footwear industries, who are expected to be the primary beneficiaries.
- Cheaper European Cars: According to reports, India is expected to slash import tariffs on European cars. Duties that currently stand as high as 110% could be reduced to approximately 40%, marking one of the most significant openings of the Indian auto market in decades.
- Global Competitiveness: Experts suggest the deal will allow Indian exporters in the garment and leather sectors to compete more effectively with countries like Bangladesh and Vietnam. While the EU imports $125 billion worth of textiles annually, India currently holds only a 5-6% share—a figure expected to rise sharply under the new FTA.
- Strengthening Global Supply Chains: The Prime Minister noted that this agreement complements India’s existing trade deals with Britain and the European Free Trade Association (EFTA), further solidifying India’s position as a reliable global trade partner and investment hub.
“This free trade agreement will strengthen confidence in India for every business and every investor in the world,” PM Modi stated, adding that the deal opens immense opportunities for 140 crore Indians and millions of Europeans.
The announcement follows high-level meetings at Hyderabad House in New Delhi between Prime Minister Modi, European Council President António Costa, and European Commission President Ursula von der Leyen. The deal is seen as a strategic masterstroke that will reshape trade dynamics between Asia and Europe for years to come.
