The European Union and India have introduced a landmark commerce deal after almost 20 years of on-off talks, as either side purpose to deepen ties amid tensions with the US.
“Europe and India are making historical past at the moment. We have now concluded the mom of all offers,” European Fee President Ursula von der Leyen posted on X.
Von der Leyen and European Council President António Costa are in Delhi, the place they met Indian Prime Minister Narendra Modi at a bilateral summit.
Each India and the EU are looking for to strengthen strategic and commerce ties with the remainder of the world as they cope with financial and geopolitical stress from the US.
Delhi is grappling with 50% tariffs imposed by President Donald Trump final yr amid talks aimed toward securing a commerce deal between India and the US which might be nonetheless dragging on.
Final week, Trump threatened to escalate his commerce conflict with European allies for opposing a US takeover of Greenland earlier than backing off.
That bigger geopolitical context was evident in latest statements made by leaders.
On Tuesday, von der Leyen wrote: “We have now created a free commerce zone of two billion individuals, with either side set to profit. That is solely the start. We’ll develop our strategic relationship to be even stronger.”
A day earlier than that, Costa had mentioned, with out naming the US, that the commerce deal would ship an “essential political message to the world that India and the EU imagine extra in commerce agreements than in tariffs” at a time when protectionism is on the rise and “some international locations have determined to extend tariffs”.
Extra particulars concerning the deal are anticipated to be introduced quickly, throughout a media briefing.
Von der Leyen and Costa arrived in Delhi over the weekend and had been the chief visitors at India’s vibrant Republic Day celebrations on Monday.
On Tuesday, the leaders posed for pictures with Modi, with the bonhomie between them evident.
The formal signing is prone to happen solely later this yr, after the settlement is accredited by the European Parliament and the European Council.
The deal will increase market entry for Indian exports to Europe whereas easing entry for European investments and items, equivalent to vehicles and drinks, into Asia’s third-largest financial system.
“It is a excellent instance of a partnership between two main economies of the world… This settlement represents 25% of the worldwide GDP and one-third of worldwide commerce,” Modi mentioned whereas inaugurating the India Vitality Week convention on Tuesday.
The EU is India’s largest buying and selling accomplice in items, with bilateral merchandise commerce reaching $136bn (£99.4bn) in 2024-25, almost doubling over a decade.
Talks for a deal between India and the EU began in 2007 however stalled in 2013 over roadblocks in market entry and regulatory calls for. Discussions had been formally restarted in July 2022.
The primary sticking factors had been entry to India’s vehicle market, agriculture items and carbon-linked tariffs – and analysts might be studying the high quality print to see what the ultimate settlement says on these points.
Officers from either side labored arduous over the previous few days to finalise excellent chapters of the settlement, aiming to wrap it up earlier than the EU leaders’ go to.
The settlement comes as stress grows on Delhi and Brussels to safe different markets for exporters.
Previously seven months, India signed main commerce agreements with the UK, Oman and New Zealand, and a 2024 pact signed with the four-nation European Free Commerce Affiliation bloc of Switzerland, Norway, Iceland and Liechtenstein has come into impact.
The EU, in the meantime, signed a commerce deal with South Asian commerce bloc Mercosur earlier this month after 25 years of negotiation.
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