NewKerala.com

India-EU FTA: $75B Export Boost & Auto Duty Cuts Herald New Trade Era

The Confederation of Indian Industry hails the India-EU Free Trade Agreement as a game-changer, providing unprecedented preferential access for over 99% of Indian exports worth $75 billion. The deal is a strategic breakthrough that will significantly benefit labour-intensive sectors like textiles, leather, and gems, anchoring Indian manufacturers deeper into global value chains. A major component is the slashing of tariffs on European car imports to India from 110% down to 10% under an annual quota, opening the world's third-largest auto market. The agreement aims to create a stable environment for investment and innovation, supporting India's long-term vision for developed nation status by 2047.

Key Points: India-EU FTA: $75B Export Access & Auto Tariff Cuts

  • Preferential access for 99% of Indian exports
  • Auto import tariffs cut from 110% to 10%
  • $33B boost for labour-intensive sectors
  • Foundation for Viksit Bharat 2047 vision
3 min read

Unprecedented preferential access for Indian exports in EU FTA a game changer: Industry

Landmark India-EU trade deal grants preferential access for 99% of Indian exports, slashes car tariffs to 10%, and boosts textiles, leather, and gems sectors.

"It decisively improves competitiveness in the EU's high-value market - Chandrajit Banerjee, CII"

New Delhi, Jan 27

The unprecedented preferential access secured for over 99 per cent of Indian exports is a game-changer for Indian industry, the Confederation of Indian Industry said on Tuesday.

With the India-EU deal, Rs 6.41 lakh crore ($75 billion) worth exports are poised for take-off, with $33 billion of exports in labour-intensive sectors like textiles, leather, marine products, gems and jewellery are set to gain immensely from preferential access under the FTA.

According to Chandrajit Banerjee, Director General, CII, the landmark agreement represents a strategic breakthrough in India's global trade engagement and significantly deepens the partnership between two major democracies and economies that together account for nearly 25 per cent of global GDP.

"It decisively improves competitiveness in the EU's high-value market, anchors Indian manufacturers and service providers deeper into global value chains, and accelerates investment, technology inflows, and scale," Banerjee said.

"Key sectors of focus include textiles and apparel, leather and footwear, gems and jewellery, marine products, engineering goods, automobiles, agriculture and processed foods, IT and IT-enabled services, and other business and professional services," he added.

By delivering tangible gains for labour-intensive sectors and MSMEs, and by enabling a future-ready mobility framework for Indian talent, the agreement lays a foundation for sustained, inclusive, and globally competitive growth which is fully aligned with India's vision of Viksit Bharat at 2047, said CII.

Balbir Singh Dhillon, Brand Director, Audi India, welcomed the proposed FTA, recognising its potential to deepen economic ties with one of the world's largest trading blocs.

"This constructive approach to trade could support the broader automotive ecosystem, including innovation, supply-chain efficiency, and technology collaboration. That said, any implications for pricing and market can only be assessed once the final terms are available and carefully reviewed, including the timeframe of implementation. Until then, it would be premature to draw conclusions on specific commercial or product strategies," he mentioned.

Dhillon said the India-EU FTA will create a stable and predictable environment for European automakers to invest, innovate, and better serve Customers in India.

The FTA brings tariffs on European cars entering India to 10 per cent from the current high level of 110 per cent. This lower duty will apply under an annual quota of 250,000 vehicles. At present, India charges a 70 per cent duty on imported passenger cars priced below $40,000, while vehicles costing more than $40,000 attract an effective customs duty of 110 per cent.

The move opens up new opportunities for European carmakers in the Indian market, which is currently the world's third-largest by sales.

- IANS

Share this article:

Reader Comments

R
Rohit P
Great strategic move. Deepening ties with the EU is crucial. However, I hope we have strong safeguards for our agriculture and dairy sectors. We cannot afford another situation like the RCEP concerns. Let's celebrate, but proceed with caution.
A
Aman W
The auto duty reduction from 110% to 10% is huge! Finally might be able to realistically consider that European car I've been eyeing. But will the companies actually pass on the savings to customers, or just increase their margins? That's the real question.
S
Sarah B
As someone working in IT services, the mention of IT/ITeS being a key focus is very promising. This could mean more projects, better collaboration, and technology transfer. A stable framework for Indian talent is exactly what the industry needs for the next phase of growth.
K
Karthik V
₹6.41 lakh crore potential is a staggering number. This is the kind of economic diplomacy we need. It anchors 'Make in India' into global value chains. Hope our manufacturing quality and standards can meet EU expectations consistently. Jai Hind!
M
Meera T
While the export boost is welcome, I'm concerned about the influx of cheaper European goods under this FTA. What about our local manufacturers? We need to ensure a level playing field and not just become a market for foreign products. The deal must be mutually beneficial.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50