Italian media: India-EU trade agreement reshapes the balance of Sino-US relations

After years of negotiations, both sides announced the conclusion of a comprehensive trade agreement that lowers tariffs, promotes trade and investment, and strengthens strategic cooperation in areas including security and defense. The agreement comes at a time when India's relations with Washington are increasingly tense and competition with China is intensifying. For New Delhi, this move reinforces India's central role in the economic and geopolitical balance between the West and the Global South.

New Delhi (Asia News/Press Agency) – India and the EU announced the completion of negotiations on a comprehensive trade agreement to address the trade tensions caused by the Trump administration's imposition of tariffs.

The European Commission stated in a statement that the value of goods and services exchanged between the EU and India annually exceeds 180 billion euros. The agreement is expected to double Europe's exports to India by 2032, thanks to the elimination or reduction of tariffs on 96.6% of European export goods.

Indian Minister of Commerce Piyush Goyal shared a video message on X, in which Prime Minister Narendra Modi stated that the agreement brings "huge opportunities" for both sides, covering areas accounting for 25% of global GDP and one-third of international trade. "In addition to trade, the agreement also strengthens our common commitment to democracy and the rule of law," he said.

Subsequently, Modi addressed Indian manufacturers in Hindi: "I congratulate all those engaged in industries such as textiles, gems and jewelry, leather and footwear, because this agreement will be beneficial for all of you. This trade agreement will not only strengthen India's manufacturing sector but also further expand its service industry."

EU Commission President Ursula von der Leyen also praised the agreement as historic. She posted on X: "Today, Europe and India are making history. We have signed the mother of all agreements." Von der Leyen also emphasized that the agreement "is just the beginning," and that both sides "will further deepen their strategic relationship, making it stronger."

Specifically, the agreement significantly reduces tariffs on certain European products in India. Currently, the tariff on European wine is 150%, which will be reduced to 75% and then further to 20%; the tariff on olive oil will be reduced from 45% to 0% within five years.

The agreement also brings significant opportunities for European automakers, with the tariff on cars imported from the EU being reduced to 10%, opening up a vast Indian market for automotive groups such as Volkswagen and Renault for the first time. The Indian market has long been dominated by local and Asian manufacturers, especially Suzuki and Hyundai, which mainly offer affordable, compact models that are popular among consumers, while European manufacturers currently have a market share of less than 3%. India is the world's third-largest automobile market after the United States and China, and its annual sales are expected to exceed 6 million units by 2030.

However, the agreement retains some safeguard measures for sectors considered sensitive by New Delhi, particularly agriculture and certain categories of small engine vehicles, which will be excluded or subject to specific safeguard measures. The agreement goes beyond tariff reductions and includes non-tariff measures aimed at promoting trade and investment, such as simplifying customs procedures, increasing regulatory predictability, establishing common rules on procurement and services, and providing tools to incentivize bilateral investment. At the same time, India and the EU also signed a Security and Defense Partnership Agreement. A brief document from the EU states that this partnership covers "maritime security, defense industry, cyber and hybrid threats, space, and counter-terrorism."

The agreement was announced during the visit of von der Leyen and European Council President Antonio Costa to New Delhi for a summit with Modi. Previously, the Trump administration had criticized the EU for advancing this agreement with India.

In August, Trump imposed tariffs of up to 50% on Indian products and an additional 25% tariff on Russian oil purchased by New Delhi. U.S. Treasury Secretary Scott Bessent told ABC News, "We imposed a 25% tariff on India's purchase of Russian oil. Do you know what happened last week? Europeans signed a trade agreement with India."

However, some commentators point out that the agreement between India and the EU was already on the table before the U.S. began imposing tariffs on its allies, especially during the first term of Prime Minister Modi starting in 2014. In 2019, India withdrew from the Regional Comprehensive Economic Partnership (RCEP), which included multiple Asian countries, fearing that the agreement would primarily benefit East Asian economies, especially China, thereby exacerbating New Delhi's trade deficit and putting pressure on sensitive sectors such as manufacturing and agriculture.

The Indian government believes that the agreement lacks sufficient safeguard provisions against increased imports of low-cost goods, and the benefits for services and the movement of technical workers (a core area of the Indian economy) are too limited. Since then, India has focused on concluding more targeted agreements with Western partners considered economically complementary, including the UK and the EU.

In recent years, the ideal conditions for signing the agreement have been formed: in addition to the easing of relations between New Delhi and Beijing, both India and Europe are committed to diversifying international relations without abandoning economic and security ties with Washington. For India, this is the most important trade agreement it has ever negotiated with a foreign country, reinforcing the belief within India that trade liberalization is a key lever to achieve its goal of becoming a developed country by 2047. At the same time, it also reinforces Prime Minister Modi's repeated assertion that India is the bridge between the West and the Global South, located at the center of the global economic and geopolitical balance.

Original: toutiao.com/article/1855519623701515/

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