The recent announcement of a free trade deal between the European Union and India is among the biggest things that have happened in global trade lately. The two parties have eventually concluded a very detailed agreement that is meant to change the way in which goods move between Europe and the fastest growing economy in Asia for over twenty years.
Reasons Why the EU–India Trade Deal Is Strategically
Important
This deal has been reached when there is an increase
in geopolitical divides, trade protectionism, and supply chain reorganization.
To the EU, India is an essential substitute manufacturing and services center
as it moves away from China. On the other hand, India will strengthen its plans
of being a global exporting giant and manufacturing hub through accessing the
EU’s single market.
The two combined make up a market of over 1. 9
billion people, and they control a significant portion of the world’s wealth.
By doing this deal, it shows that even with everything happening globally, some
of the largest economies are still open to international trade.
What Does The Agreement Entail
It is anticipated that
the following will be achieved under the free trade agreement:
Reduction or
elimination of tariffs on thousands of product lines
Increased access for
services such as IT, financial services, and professionals moving around
Better protection for
investments and improved ways of resolving disputes
Simplification of
customs processes and harmonization of regulatory requirements
Cooperation enhancement
in digital trade, clean energy, and intellectual property
It was noted that there were sensitive areas like
agriculture, automobiles, pharmaceuticals, and data protection which had caused
delays in negotiations in the past but these were said to have been dealt with
through staggered implementation as well as safeguard clauses.
Next Steps Before Implementation
After the announcement, the agreement will be
legally scrubbed, translated into official EU languages and undergo domestic
approval processes. Member states and EU institutions will review it in the EU,
while India will go through its internal ratification process.
Although there is no specific timeline for this, it
was stated by the officials that both sides would like to proceed
expeditiously.
A New Framework for India–EU Trade Relations
Upon its full ratification, the free trade agreement
will create a legal basis for economic relations between India and the European
Union. This is a major milestone following many years of negotiations and paves
way for the post-Brexit era India-EU trade under a concluded legal text.
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