To bend India's will, the US imposed a 50% tariff, expecting India to succumb to pressure. However, India stood firm and quietly explored alternative markets. The landmark trade deal with the European Union is a monumental testament to this resolve. It's a clear message to America and Trump - India won't be coerced. This free trade agreement with the European Union has unsettled the U.S.
The question arises: Has India found an antidote to American tariffs? Can the defense cooperation post Free Trade Agreement with the European Union position India as a major hub for defense manufacturing? Is India poised to emerge as a military 'superpower' on the global stage? And will this partnership shift the global world order? Let's address these questions one by one.
Experts in global economics believe the trade deal with the European Union is not merely a trade agreement; it's a decisive step towards establishing India as an economic powerhouse. This will distinctly enhance employment, investment, exports, and global influence for India. The root of America's concern is evident. The Trump administration assumed a 50% tariff would isolate India globally. They misjudged, thinking India relied on their $30 trillion economy. India decisively pivoted towards the vast market of the European Union, culminating in the 'Mother of All Deals' with European nations. This trade agreement opens up the world's second-largest market for Indian products.
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No Tariff on 9,425 Indian Products
The agreement is set to be operational by 2027, but its impacts are already noticeable. Threatening India over trade and tariffs is no longer feasible. It's dubbed the 'Mother of All Deals' because it encompasses nearly one-third of global trade and 25% of the global GDP. The world's second (European Union) and fourth-largest (India) economies are now advancing together.
India's exports will gain approximately $75 billion in added reach. Notably, this deal eliminates tariffs on 9,425 Indian products in European Union countries. This agreement could be a significant export engine for Indian industries, giving manufacturers direct access to European consumers, which will greatly benefit the MSME sector.
A Major Opportunity for the Service Sector
This trade deal facilitates easy entry for Indian professionals into 144 service sectors across Europe. Students studying in Europe will receive at least a 9-month visa post-study, and professionals in traditional Indian medicine will get work opportunities in Europe. This deal will also impact common citizens, making olive oil, vegetable oil, and margarine from Europe more affordable. Taxes on luxury cars will gradually reduce from 110% to 10%. Premium spirits, wine, and beer will become cheaper.
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Medical and surgical equipment, aircraft, and space sector products will also be more affordable. Cars like Mercedes, Audi, Land Rover, Ferrari, Lamborghini, Porsche, and Volkswagen may become more accessible. Overall, the ball is now in America's court. The world understands that the future leans towards India. This is precisely why the trade deal between India and the EU could elevate India not only economically but also strategically and militarily.
Discover How India Benefits from EU Trade Deal
1. Rapid Export Growth
Over 9,000 Indian products will see tariffs abolished or reduced
Textile, gems and jewelry, auto parts, and engineering goods gain direct European entry
EU is the world's second-largest consumer market
2. Strengthening MSMEs and Manufacturing
Direct entry for small and medium industries to European customers
Boost for Make in India and Export-led Growth
New orders will increase employment opportunities
3. Direct Benefits for Farmers and Fishermen
Exports of fruits, vegetables, processed foods, and marine products to rise
Better prices and stable demand
Encouragement for the agri-processing sector
4. Major Boost for the Service Sector
Opportunities in IT, fintech, education, health, and traditional medicine
Easy access for Indian professionals in 144 European service sub-sectors
Better visa opportunities for students and skilled workers
5. Increase in Foreign Direct Investment (FDI)
Heightened EU investment in India
Promotion of technology transfer and advanced manufacturing
India will become a Global Supply Chain Hub
6. Strengthening Defense and High-Tech Sector
Joint ventures in defense production
Collaboration in semiconductors, EVs, batteries, and green hydrogen
Strengthening India's strategic and military capabilities
7. Relief for Common Consumers
Affordable European cars, medical equipment, wine, beer, and olive oil
Reduction in healthcare and transportation costs
8. Increase in Global Strategic Strength
Alternative to tariff pressures from countries like America
Strengthening India's independent foreign and trade policies
India is creating a new global economic balance
