India and the European Union (EU) have completed official level negotiations for the proposed Free Trade Agreement (FTA). This agreement will promote two-way trade and strengthen economic relations. Commerce Secretary Rajesh Aggarwal gave this information on Monday. The agreement is expected to be signed this year and could come into effect early next year.
what will be cheaper
The Commerce Secretary said, ‘The official level talks are about to conclude and both sides are all set to announce the successful conclusion of the Free Trade Agreement (FTA) negotiations on Tuesday, January 27.’ “The negotiations have been successfully completed and the deal has been finalised,” the Commerce Secretary said. He said that at present the legal investigation of the draft agreement is going on. The government’s effort is to complete these processes quickly and sign the agreement.
why will it take time
The agreement will take time to be implemented, as it requires the approval of the European Parliament, whereas in India only the consent of the Union Cabinet is required. This agreement has been finalized after 18 years of long negotiations. The talks started in the year 2007. A formal announcement on the completion of the talks will be made at the India-EU summit to be held here on Tuesday. Prime Minister Narendra Modi will hold summit talks with European Commission President Ursula von der Leyen and European Council President Antonio Costa on January 27.
How much trade between India and European Union
The European Union is a major trading partner of India. Bilateral trade in goods between the two stood at US $ 136.53 billion in the financial year 2024-25. In this, India’s export was 75.85 billion US dollars and import was 60.68 billion US dollars. Additionally, the EU is also a major investor in India, with cumulative foreign direct investment (FDI) amounting to US$117.4 billion from April 2000 to September 2024.
Luxury cars will become cheaper after the agreement
Under the FTA, there will be an agreement between India and the European Union on tariff rate quota, in which the quota for importing luxury vehicles from Europe to India will be determined on an annual basis. These vehicles will be allowed to be imported with lower import duty. Sources say that in the first phase, cars costing more than 15 thousand euros i.e. about Rs 16.3 lakh will be allowed to be imported in limited numbers with low import duty. With this, European cars like Volkswagen, Audi, Mercedes-Benz and BMW will be able to come to the Indian market at cheaper rates.
Liquor and diamonds will also be cheaper
After the agreement, liquor, wine and rough diamonds coming from Europe will also become cheaper. Rough diamonds in India mainly come from Belgium (especially the city of Antwerp) in Europe. Belgium is the world’s leading diamond trading centre. Through the agreement, Europe will get relief from import duty if diamonds are sold in the Indian market. At the same time, India imports liquor like Scotch whiskey, vodka and gin from Europe, mainly Britain and Ireland, which are famous for their high quality. Apart from this, wines from Europe are also brought to India in large quantities, the import duty of which will be lower. In such a situation, the prices of liquor and wine will also fall. Along with this, chocolate is imported into India from Switzerland, Luxembourg and Netherlands in Europe, whose prices will also be affected after the agreement.
(Includes agency input)