New Delhi: Don’t be surprised if the bill comes down while buying foreign chocolates in the coming months, or if the price of a car coming from Europe costs less – This is set to be a reality as India and the European Union (EU) signed ‘Mother of all trade deals’ on Tuesday. The India-EU Free Trade Agreement (FTA) was formally signed in presence of Prime Minister Narendra Modi, European Commission President Ursula von der Leyen and European Council President António Costa.
In this new trade agreement signed between India and the EU, the tariff levied on about 96.6 percent of European goods will be reduced or completely removed. Currently, many things are taxed from 50 to 150 percent. After this agreement, this tax can come down from zero to 20 percent in many cases. According to the EU, this deal will save European companies about 4 billion euros every year.
India-EU FTA: What will be cheaper for Indians
| Product | Existing Tariff (%) | New Tariff (%) |
| machinery and electrical equipment | 44 | 0 |
| Aircraft and spacecraft | 11 | 0 |
| Optical, medical and surgical equipment | 27.5 | 0 for 90 of products |
| plastic | 16.5 | 0 |
| Pearls, precious stones and metals | 22.5 | Tariff reduction of 0% on 20 products and 36% on other products |
| Chemicals | 22 | 0 |
| motor vehicle | 110 | 10 (quota of 250k) |
| Metal and steel | 22 | 0 |
| medicines | 11 | 0 |
The Free Trade Agreement will enable over 99 per cent of Indian exports to gain preferential entry into the EU, unlocking massive growth potential. The Indian MSMEs will also be beneficial as it has the potential to bring in open new opportunities for the sector and create jobs for women, artisans, youth and professionals.
“Rs 6.41 lakh crore (USD 75 nillion) exports poised for take-off, 33 billion USD of exports in labour-intensive sectors like textiles, leather, marine products, gems and jewellery set to gain immensely from preferential access under the FTA,” the Ministry of Commerce & Industry said.
| Product | Existing Tariff (%) | New Tariff (%) |
| wine | 150 | 20% (premium range); 30% (medium range) |
| alcohol | Up to 150 | 40 |
| beer | 110 | 50 |
| Olive Oil, margarine and other vegetable oils | up to 45 | 0 |
| Kiwis and pears | 33 | 10 in-quota |
| Fruit juice and non-alcoholic beer | up to 55 | 0 |
| Processed foods (bread, pastries, biscuits, pasta, chocolate, pet food) | up to 50 | 0 |
| sheep meat | 33 | 0 |
| Sausages and other meat preparations | up to 110 | 50 |
India is the fourth largest economy, while the European Union is the second largest economy, comprising 25% of the Global GDP.
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