India and EU Join Hands for a Big Trade Deal

India and the EU have just concluded negotiations on a significant trade deal. This agreement marks a major milestone for both parties, facilitating easier trade and investment between the two regions. Together, they represent a substantial portion of the global economy, and this deal is anticipated to enhance economic ties.

Next Steps and Timeline

The deal is not yet ready for signing. It must undergo legal scrutiny, a process expected to take five to six months. Afterward, implementation could take an additional year. Despite the lengthy timeline, both sides express enthusiasm.

Recent Trade Agreements

The EU has recently secured major trade deals with South America, Indonesia, Mexico, and Switzerland. India has also inked agreements with Britain, New Zealand, and Oman. These deals reflect a global shift toward diversifying trade partnerships, partly driven by tensions with the United States.

Resumption of Talks and Key Challenges

Negotiations between India and the EU resumed in 2022 after a nine-year hiatus. The talks gained momentum following U.S. tariffs on multiple countries, including India. The U.S. and India failed to reach a trade agreement last year.

Key Negotiation Points

• Cars and Steel: The EU sought lower taxes on cars from India, while India pushed for easier access to the EU market for steel.
• Potential Compromise: India may reduce car taxes from 110% to 40%.
• Exclusions: Certain farm products are excluded from the deal to protect Indian farmers.