India and the European Union have officially signed a free trade agreement after nearly twenty years of stalled talks and political back-and-forth.
Prime Minister Narendra Modi called it the “mother of all deals” during his speech at India Energy Week on Tuesday. The announcement followed the agreement’s finalization on Monday.
The EU bloc, which accounts for around 25% of global GDP and nearly a third of worldwide trade, is now locked into an economic partnership with India.
Modi said this deal will sit alongside India’s other trade arrangements with Britain and the European Free Trade Association, tightening India’s global trade network. “This deal will prove to be very supportive to these sectors,” Modi said, pointing directly to textiles, leather, gems and jewelry, and footwear.
Trade deal follows decades of stalled negotiations
The signing marks the end of a negotiation process that began years ago but got real momentum again in 2022, when both sides decided to give it another go.
The delay came down to disagreements on agriculture and automotive trade, areas both sides have been known to protect heavily.
Hosuk Lee-Makiyama, director at the European Centre for International Political Economy, said both India and the EU tend to be “very protectionist,” which slowed the talks for years.
He said neither India nor the EU had managed to secure major trade deals in recent years, and with the U.S. and China off the table, this might be “one of the best they can get.”
The deal creates a trading block covering 2 billion people. The timing is no accident either. With global tensions and supply chain dramas still going on, both India and the EU are betting big on closer economic ties.
A joint statement from Modi and EU Commission President Ursula von der Leyen was expected later Tuesday during the India-EU summit in New Delhi, outlining the fine print of the agreement.
U.S. criticizes EU for going ahead with India deal
The United States wasn’t thrilled. Treasury Secretary Scott Bessent hit back at the EU for going ahead with a major deal with India while the U.S. still has trade restrictions in place. Speaking on ABC News, Scott said:-
“The U.S. has made much bigger sacrifices than Europeans have. We have put 25% tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India.”
As for Donald Trump, now the 47th president of the United States, he hasn’t said anything publicly yet. But no one in D.C. is expecting applause.
Meanwhile, India’s Petroleum and Natural Gas Minister Hardeep Singh Puri tried to keep the tone neutral when speaking to CNBC. “I would try and look at the positive side,” Puri said, brushing aside concerns about delays. He added that a U.S.-India trade deal is “at a very advanced stage” and suggested, “Everybody needs to chill a bit.”
Puri said he was told by officials in the negotiations that the U.S. deal could come soon, though he didn’t give a timeline. He also described India’s relationship with Washington as “very strong,” and claimed that India’s open stance on trade was clear from the EU agreement.
“There’s an economic opportunity here for others who want trade deals,” Puri added. “It’s going to be a mutual benefit, not only for the EU but the United States and elsewhere also.”
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Source: https://www.cryptopolitan.com/india-eu-finalize-free-trade-agreement/
