India and the European Union (EU) have finalised a long-pending landmark trade deal, both sides said on Tuesday, as they seek to hedge against fickle ties with the United States (US).
The deal is expected to double EU exports to India by 2032 by eliminating or reducing tariffs in 96.6% of traded goods by value, and will lead to savings of $4.75 billion in duties for European companies, the EU said.
The EU will cut tariffs on 99.5% goods traded over seven years, with tariffs to be cut to zero on Indian marine goods, leather and textile products, chemicals, rubber, base metals and gems and jewellery, India’s trade ministry said in a statement.
“Yesterday, a big agreement was signed between the EU and India,” Indian Prime Minister Narendra Modi said earlier.
“People around the world are calling this the mother of all deals.
This agreement will bring major opportunities for the 1.4 billion people of India and the millions of people in Europe,” he said.
The accord would open up India’s vast and highly guarded market, with New Delhi slashing tariffs on cars to 10% over five years from as high as 110%, according to an EU statement, benefiting European automakers such as Volkswagen, Renault, Mercedes-Benz and BMW.
India is also slashing tariffs on alcoholic beverages like wines to 75% immediately from 150%, which would be lowered to 20% gradually.
Tariffs on spirits will be lowered to 40%, the EU said.
The deal will also cut tariffs on a slew of EU goods coming to India including machinery, electrical equipment, chemicals and iron and steel, the EU said.
–Reuters–
