French media: After 20 years of negotiations, EU and India reach free trade agreement to create a super market for 2 billion people

After nearly two decades of long negotiations, India and the EU have taken a historic step. On Tuesday, both sides officially announced the unprecedented free trade agreement in New Delhi. Indian Prime Minister Modi called it "the agreement of agreements," which will create a huge free trade area covering about 2 billion people, accounting for about a quarter of global GDP and one-third of global trade volume.

Against the backdrop of high international geopolitical uncertainty and frequent global trade frictions, this agreement is seen as a strategic choice for India and the EU to better counter China's growing competitive pressure and the impact of U.S. trade war tariffs.

At the moment when the free trade agreement, which had undergone 20 years of lengthy negotiations, was finally reached, Indian Prime Minister Narendra Modi and two EU leaders, European Council President Charles Michel and European Commission President Ursula von der Leyen, celebrated this achievement with the highest praises in front of journalists in New Delhi. Modi happily said, "This is the agreement of agreements. It will bring many opportunities to 1.4 billion Indians and millions of EU residents. It is not just a trade agreement, but a path to common prosperity." Von der Leyen also stated, "Europe and India have created history today."

"We have created a free trade area with 2 billion people, which will benefit both sides."

Until Monday, the final negotiations by both sides eliminated the last obstacles for the final signing of the agreement.

India and the EU hope to promote trade by reducing reciprocal tariffs in many areas. According to the EU, India will reduce tariffs on imports from the EU by more than 96% in value. Especially in key sectors such as automobiles, alcoholic beverages, and food products. The tariff on "Made in Europe" cars will be reduced from the current maximum of 110% to 10% within five years; wine tariffs will be gradually reduced from 150% to 20%; and the approximately 50% tariffs on foods like pasta and chocolate will be completely abolished.

The EU estimates that the tariff reduction on EU products by India could save European companies about 4 billion euros annually, aiming to double exports to India by 2032. Ursula stated upon arriving in India on Sunday, "The EU hopes to achieve the highest level of trade access in the historically protected Indian market."

On the EU side, the EU has committed to gradually eliminating tariffs on Indian products over the longest period of seven years, but certain sectors such as automobiles, steel, and some agricultural areas will remain protected. Modi emphasized that India expects growth in exports across numerous fields such as textiles, gems, jewelry, leather, and services.

The India-EU free trade agreement is not limited to economic aspects, but also includes expanded cooperation in defense and security areas, highlighting its significance. Von der Leyen stated, "We are not only strengthening our economic strength, but also ensuring the safety of our people in an increasingly turbulent world. By integrating our strengths, we are reducing our strategic dependence at a time when trade weapons are being widely used."

In recent years, the trade relations between the US and the EU, and the US and India have been repeatedly hit. Trump's tariff policies have prompted many countries to accelerate the layout of a "de-risking" trade network. In the past year, the EU has reached or advanced trade agreements with Mercosur, Indonesia, Mexico, and Switzerland; India has also completed negotiations with the UK, New Zealand, and Oman.

According to EU statistics, in 2024, the EU's goods trade with India reached about 120 billion euros, and service trade about 60 billion euros, increasing by nearly 90% over the past decade. For the EU, India's population of 1.5 billion represents an important market that cannot be ignored in global competition. India's economy has maintained rapid growth for many years, with an 8.2% year-on-year growth in the fourth quarter last year.

According to the International Monetary Fund's forecast, India will replace Japan this year to become the fourth largest economy in the world, after the United States, China, and Germany. The Indian government expects the country to enter the top three in the world before 2030.

On the Indian side, Europe is viewed as an important source of technology and investment needed to accelerate its modernization process and create millions of jobs for its people.

New Delhi and Brussels also plan to draft two agreements, one involving the exchange of seasonal workers, students, researchers, and certain high-skilled professionals, and another regarding security and defense treaties. As von der Leyen emphasized on social media, "India and Europe have made a clear choice: strategic partnership, dialogue, and openness," she said, "We are showing a divided world that there is another possible way."

In defense matters, New Delhi has already diversified its military equipment procurement by moving away from its traditional Russian suppliers, while Europe is also making similar attempts against the US.

Source: rfi

Original: toutiao.com/article/1855483458533379/

Statement: This article represents the views of the author."