EU-India: Free Trade Agreement negotiations finalized
On Tuesday, the European Union and India finalized negotiations for a Free Trade Agreement (FTA) to open a new strategic chapter between the two trading partners.
It took almost twenty years of negotiations for the EU-India Free Trade Agreement to be finalised on 27 January.
This agreement presented as « Agreement of all agreements » the European Commission foresees an unprecedented reduction in customs duties between the two partners.
The major winners will include the automotive, wine and spirits, machinery, chemistry and pharmacy sectors on the European side: India will offer the EU exceptional tariff advantages, higher than those granted to its other partners. Car duties will increase from 110% to 10%, while car parts will be completely exempt after five to ten years. The duties on machinery (44%), chemicals (22%) and pharmaceutical products (11%) will be largely abolished.
On the Indian side, the textile, leather, engineering and seafood sectors will be boosted by tariff reductions at entry into the EU.
Beyond the trade side, there is also a question of establishing a strengthened framework for cooperation in defence and security, as well as a mechanism to facilitate the mobility of skilled workers and students while providing for a high level of protection of intellectual property rights.
The agreement is politically concluded, but still has to undergo a legal review and then be formally signed by the parties; l‘entry into force is envisaged at the earliest by early 2027 After ratification by the Council and then the European Parliament.
Tariff preferences are therefore not yet effective, but development projections with India can be prepared.