New Delhi: Recently, India and the European Union (EU) reached a landmark free trade deal which is touted as one of the world’s most ambitious trade pacts. Now, both nations will extend Most Favoured Nation status to each other for five years once their trade agreement takes effect.
The information has been revealed by a draft of the deal on Friday. A month ago, European Commission President Ursula von der Leyen and European Council President Antonio Costa visited New Delhi to meet Prime Minister Narendra Modi to give the trade agreement’s final draft its shape.
Deal to create world’s largest trade zone
According to the World Economic Forum, the deal, which aims to remove trade barriers and open up new export opportunities, creates the world’s largest free trade zone, encompassing two billion people and nearly 25 per cent of global gross domestic product.
European Commission President Ursula von der Leyen said at that time, “We have delivered the mother of all deals. This is a tale of two giants – the world’s second- and fourth-largest economies. Two giants who choose partnership in a true win-win fashion.”
On the other hand, PM Modi, while speaking about the deal, said, “This agreement will deepen the economic ties, create new opportunities for our people, and strengthen the partnership between India and Europe for a future characterized by prosperity.”
Deal to boost India’s agricultural, food sectors
Under the deal, India will eliminate or reduce tariffs on 96.6 per cent of EU exports by value. Meanwhile, the EU will reciprocate by reducing tariffs on 99.5 per cent of Indian goods. The European Commission projects $4.7 billion in annual duty savings, with exports potentially doubling by 2032.
The deal will reportedly boost India’s agricultural and food sectors. The Union Ministry of Commerce and Industry stated that India secured “preferential market access for its agricultural exports, boosting competitiveness for processed foods.”