The draft of the historic Free Trade Agreement (FTA) between India and the European Union (EU) has been prepared. According to Reuters report, as soon as this agreement comes into force, both will give each other Most Favored Nation (MFN) status. This means that both sides will be bound by the rules of the World Trade Organization (WTO) and will not be able to impose any new export-import ban apart from the global rules.
This agreement has been reached after a long process of almost 2 decades. Prime Minister Narendra Modi has termed this agreement as a new blueprint for shared prosperity. European Union (EU) President Ursula von der Leyen has described it as a free trade area of ​​2 billion people, which will further strengthen the economic security of the world.
European markets will be fully opened for India
This agreement will phase out or reduce tariffs on 96.6 percent of products based on trade value. EU will open 99.5 percent of its market to India. Tariffs on most products will become zero immediately or within a maximum of 7 years. India will remove tariffs on 96 percent of goods of trade value.
Agriculture sector out of this agreement
Let us tell you that this process will be completed in a phased manner in the next 10 years. Both sides have kept sensitive agricultural sectors like dairy, rice, sugar and beef out of this agreement so that the interests of local farmers can be protected. This agreement is expected to bring huge economic benefits to both the parties. Indian exporters’ textiles, leather, gems and jewelery and seafood will get immediate zero-tariff access to the European market.
Cooperation on digital business also
At the same time, European car manufacturers and liquor producers will get the benefit of huge duty cuts in the Indian market. It is estimated that by 2032, European exports to India will double and European companies will save approximately 4 billion euros annually. Apart from tariffs, it has been agreed to make food security WTO compliant.
Apart from all this, both sides have committed to deepen digital business cooperation, in which privacy is considered a fundamental right. However, both countries will retain their rights on personal data protection and cross-border data flow.
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