Duty-free access for apparel, concessions for cars, wines: What's all on table as India-EU ink key trade pact ?
PTC News Desk: India and European Union on Tuesday announced signing of historic Free Trade Agreement (FTA) under which several sectors such as apparel, chemicals and footwear will get duty-free entry into the 27-nation bloc, while the EU will get access to the Indian market at concessional duty for cars and wines, an official said.
The agreement, finalized after more than 20 years of negotiations, has been described as the “mother of all deals,” as it is expected to create a combined market of nearly 2 billion people.
An official stated that, with the exception of automobiles and steel, more than 93 percent of Indian exports to the European Union (EU) will receive zero-duty access. For the remaining goods, Indian exporters will benefit from reduced tariffs and quota-based duty concessions, including for automobiles.
Under the Free Trade Agreement (FTA), which is expected to take effect early next year, the EU will remove import duties on 90 percent of Indian products from the first day of implementation. Tariffs on an additional three percent of goods will be phased out over seven years.
“In total, the EU is offering trade concessions covering 99.5 percent of the trade value to India,” the official said. In return, the EU will gradually gain duty-free access for 93 percent of its goods in India over a ten-year period. India will eliminate duties on only 30 percent of European goods on the first day of the agreement.
India is also extending tariff concessions and quota-based reductions on 3.7 percent of trade value for EU products, bringing total duty concessions to 97.5 percent of EU trade value.
Key Indian industries set to benefit from duty-free access include textiles, garments, marine products, chemicals, plastics, rubber, leather and footwear, base metals, gems and jewellery, furniture, toys, and sports equipment. Currently, these sectors face EU import duties ranging from 0 to 26 percent.
India has also eased tariff barriers on European goods under the pact. Beyond goods and services, the FTA includes provisions on digital trade, sanitary and phytosanitary standards, technical trade barriers, and intellectual property rights. However, it does not cover energy, critical minerals, or government procurement.
Currently, average EU tariffs stand at about 3.8 percent, but under the agreement, they will be reduced to nearly 0.1 percent for Indian exports.
- With inputs from agencies
