29-01-2026
Biggest.Boldest.Historic : InsideIndia’sMotherofAllTradeDeals
The major free trade agreement between the EU and India will cut down on a lot of taxes (tariffs) on goods exchanged between the two countries.
India imports machinery, electronics, aerospace, medical equipment, chemicals, and jewels from the EU while exporting textiles, clothing, electronics, chemicals, and gems. Cars were subjectto110%taxesbeforetotheFreeTradeAgreement(FTA),withtariffsofapproximately 3.8%onEUimportsand9.3%onIndianimports.Approximately97%ofEUexportsand99% of Indian exports will receive duty reductions under the FTA, with small reductions for sensitive goods.The agreement strengthens bilateral trade and collaboration by providing EU industries with cheaper access to India while increasing Indian exports, employment, and technology access.
29-01-2026
India and the European Union both desire to expand commerce and business with one another,whichiswhythisagreementwasestablished.Duetoshiftingglobaleconomic conditions,includinggrowingtradetensionsandhightariffsimposedbyothernations,
particularlytheUnitedStates,itwasfinallyfinalizedafteryearsoftalks.Indialooksformore export chances and deeper trade ties with major, stable markets like the EU, while Europe is eager to better access India`s big consumer market of over 1.4 billion people.
Because it is the largest longest trade agreement India has ever signed, the India-EU deal is known as the "mother of all deals." It affects trade worth hundreds of billions of dollars acrossa widerangeof industries, including textiles, chemicals, food, services, investments, cars,andairplanes.Followingyearsofdifficulttalks,theoutcomeincludessignificanttariff reductionsthatwillaffectpricing,employment,andcompanycompetitivenessinanumberof industries. It is significantly more important than a normal trade deal due to its size,
economicsignificance,andpositionasamodelforfutureinternationaltradedeals.
1. Powertrains,pints,andairplanes:India`stradedealswiththeUK&EU
India`sdesiretoincreasemarketaccesswhileprotectingweaklocalindustriesiswhat
motivates its parallel trade talks with the EU and the UK.After the departure of Britain, the UKisdemandingquickerconcessionswhiletheEUwantsamorethoroughandwide-ranging deal. The result will improve its position in international value chains and influence its view of competition in the automotive, aviation, and luxury consumer goods industries.
2. India-EUtradeagreementstrengtheningtheruraleconomy
Increasedaccessforexportsfromruralandagriculturalareasisanessentialpartofthe
plannedtradedealbetweenIndiaandtheEU.Thisisgoingtoincreasefarmearnings,support value-added agricultural products, and stimulate investment in food processing and logistics. The agreement may eventually bring rural farmers closer to European markets.
3. TheEU`smessagetoIndiaoverChinatariffsandsecurity
Fearsaboutsupply-chainsecurityandfinancialdependenceappearintheEU`sindirectlinkto China. The EU`s increased engagement with India is a symptom of its intention to widen its
tradeties.Inachangingglobalorder,thisincreasesIndia`sstrategicsignificanceasa dependable manufacturing and geopolitical partner.
4. India`slegalgatewayofficeforEurope
ThegoalofopeningEurope`sfirstlegalgatewayofficeinIndiaistoeaseprofessional
transferandregulatoryprocedures.ItwillmakeiteasierforIndianprofessionalsandstudents to navigate the legal, educational, and employment systems of the EU.Alongside more
generalcommercial agreements,thisgoalenhancesinterpersonal relationships.
5.Threesetbacks,onedeal:EffectsonBangladesh,Pakistan,andTurkey
Bangladesh,Pakistan,andTurkeyarenowlesscompetitiveinEuropeanmarketsdueto
India`sincreasingtradealliancewiththeEU.Tradebenefitsinindustrieslikemanufacturing and textiles are shifted by special treatment for Indian exports. The dynamics of regional
tradearechangedbythisdevelopment,andcompetitivenessamongup-and-comingexporters is increased.
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