While Donald Trump continues his aggressive tariff strategies (Trump Tariff Attack) and issues frequent threats, India is taking a different path. Amid tariff tensions, India is poised to finalize a monumental deal with the European Union (India-EU Trade Deal), and the announcement might come as soon as tomorrow, January 27.
The European Commission's President, Ursula von der Leyen, is currently in Delhi. According to officials familiar with the matter, the India-EU FTA aims to eliminate tariffs on over 90% of traded goods, which Ursula von der Leyen has dubbed the 'Mother of All Deals.' Let's explore how this deal will benefit India.
'A Market for 2 Billion People'
EU Chairperson Ursula von der Leyen expressed great enthusiasm about the FTA with India during her Delhi visit. In her initial message upon arrival, she shared her excitement, noting that India and the EU can help mend a fractured world dealing with conflict and instability. According to reports, this deal's announcement is anticipated on January 27.
Describing it as the largest deal to date, Ursula von der Leyen stated that the agreement stands to create a market for 2 billion people, encompassing approximately a quarter of the global GDP. She expressed her delight in visiting India via a post on the social media platform Twitter (now X).
Benefits of the FTA with the EU for India
The Global Trade Research Initiative (GTRI) released a report on the India-EU trade deal, indicating the FTA is expected to be announced on January 27. This agreement is likely to help local industries reduce costs and expand trade.
According to GTRI founder Ajay Srivastava, the tariff reductions under the free trade agreement will primarily lower input costs, increase trade volume, and benefit producers and consumers on both sides. Officials linked to the matter suggest that the India-EU FTA could lead to tariff cuts or removals on over 90% of goods, especially benefiting textiles, pharmaceuticals, engineering products, and IT services.
Trade Valued at 136 Billion Dollars
Analyzing trade data for fiscal year 2025 shows that trade in goods between India and the EU exceeded 136.53 billion dollars. Concerning imports, India's imports from the EU stood at 60.7 billion dollars, with high-category machinery topping the import list at 13 billion dollars.
Electronics imports amounted to 9.4 billion dollars, including 3.7 billion dollars' worth of mobile parts and 890.5 million dollars' worth of circuits. Moreover, India imported 6.3 billion dollars worth of aircraft, 3.8 billion dollars' worth of medical and scientific equipment, and 1.4 billion dollars' worth of specialized pharmaceuticals.
Source: aajtak
India's Exports to the EU
Focusing on exports to the EU, the fiscal year 2025 saw Indian exports valued at 75.9 billion dollars. Significant contributions came from labor-intensive sectors. Topping the list were refined petroleum products, with 15 billion dollars worth of exports, including 9.3 billion dollars of diesel and 5.4 billion dollars of ATF. Electronics exports totaled 11.3 billion dollars, including smartphones valued at 4.3 billion dollars.
Clothing exports from India were valued at 4.5 billion dollars. Other critical export categories included 5 million dollars in machinery and computers, 5.1 million dollars in organic chemicals, 4.9 million dollars worth of iron and steel, and pharmaceuticals worth 3 million dollars. Exports of gems and jewelry to the EU amounted to 2.5 billion dollars, primarily featuring cut and polished diamonds valued at 1.6 billion dollars. Automobile exports reached 2.2 billion dollars.
Access to a Market of 27 Countries
This trade agreement with the European Union is particularly significant for India because of its broad scope. For Brussels, India has emerged as a key partner, helping lessen dependence on China and strengthening relationships with strategically aligned nations. This deal will enhance market access for India across the 27 member countries of the EU, bolstering export opportunities.
