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Deal between India and European Union

The possible free trade agreement between India and the European Union (EU) can prove to be a big game changer for the country. The current global trade conditions seem to be in India's favor and if the deal is implemented properly, India can get new export opportunities worth about $5 billion. This benefit can be availed at a time when Europe is trying to reduce dependence on its old trade partners.

In fact, after the trade agreement between EU and Mercur countries of South America, there is a change in the trade balance. Meanwhile, India is close to finalizing a comprehensive trade agreement with the EU. India is in advanced talks with the EU on a comprehensive trade agreement, which Ursula von der Leyen has described as a priority engagement for the bloc. This timing is important.

This will be beneficial

As the EU rebalances its trade relations and seeks to reduce over-dependence on a limited set of suppliers, competitive dynamics are changing, creating opportunities for Indian exporters in sectors currently dominated by Mercur countries. Europe now wants to make its supply chain more secure and diverse. Instead of being overly dependent on any one region, the EU is looking for new reliable suppliers. India fits this need perfectly.

Big doors will open in agriculture and food sector

Agriculture and food products can get the biggest benefit from this deal. Till now Indian products have to face high tariffs and strict rules in Europe, but the situation may change after the trade agreement. Frozen shrimp is emerging as a big opportunity for India. The demand for this category is very high in Europe and India can get access to a market worth more than 500 million dollars here. Apart from this, India's hold can also be strengthened in fruits like grapes, where exports worth millions of dollars are possible.

Manufacturing sector will also get a boost

Not only food, but sectors like garments, leather products and light engineering can also benefit from this deal. India has better scale, experienced workforce and relatively lower logistics costs compared to Mercur countries. If the EU makes even a slight change in its sourcing policy and the deal with India reduces tariffs, there could be a flood of new orders for Indian factories. This will strengthen both employment and domestic production.

India has lead in chemicals and industrial products

Europe is very strict regarding environmental and sustainability rules. Due to these rules, costs of some South American suppliers may increase. At the same time, India is already adapting itself according to many global standards, which can strengthen its position in chemicals and industrial intermediates.

Big opportunity for India

Overall, this is an opportunity for India to divert trade worth about $5 billion. However, you will not get this benefit automatically. Everything will depend on how the India-EU trade deal is designed and how effectively it is implemented on the ground. If the government and industry together adopt the right strategy, then this deal can give impetus to India's export sector at a time when Europe is thinking afresh about its trade partners.