Indian Economy News

India-EU FTA to cover one-third of global trade, impacts 2 billion people

India and the European Union’s proposed Free Trade Agreement (FTA) is expected to emerge as one of the largest trade agreements globally, covering nearly one-third of global trade and impacting around 2 billion people. Addressing a Federation of European Business in India (FEBI) event titled “Decoding EU-India FTA,” Additional Secretary in the Department of Commerce Mr. Darpan Jain, described the pact as the “mother of all deals” due to its economic scale and global significance. The statement further emphasised that the agreement is expected to account for almost one-fourth of the global GDP and around Rs. 1,029.93 lakh crore (US$ 11 trillion) in trade flows. The FTA negotiations extend beyond tariff reductions and include provisions related to trade in goods and services, digital trade, telecom, financial services, intellectual property rights and regulatory practices.

The proposed agreement is also expected to significantly enhance manufacturing cooperation, investment flows and supply chain integration between India and the EU. Industry leaders highlighted that sectors such as automobiles, textiles, chemicals, leather, and digital services could witness stronger bilateral trade opportunities once the agreement is finalised. It was further highlighted in the statement that India’s services exports have grown at nearly double the pace of goods exports over the last decade, with goods exports reaching Rs. 41.38 lakh crore (US$ 442 billion) and services exports touching Rs. 39.42 lakh crore (US$ 421 billion) this year. Business representatives stated that the FTA could help create a more predictable trade environment, improve market access, and encourage long-term investments between the two regions. The agreement is being viewed as a major strategic step for India’s global trade expansion amid evolving geopolitical and economic conditions.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.