India-EU FTA to cover one

The proposed India-European Union Free Trade Agreement (FTA) is expected to cover nearly one-third of global trade and impact around 2 billion people, making it one of the largest trade agreements in the world, Additional Secretary in the Department of Commerce Darpan Jain said on Thursday.

Addressing a Federation of European Business in India (FEBI) event titled “Decoding EU-India FTA,” Jain described the agreement as the “mother of all deals” due to its economic scale and global reach.

“On parameters such as size of trade, size of economy and the number of people it touches, it is one of the biggest deals,” he said.

Jain noted that the proposed agreement would cover nearly one-fourth of the global GDP and around USD 11 trillion in trade.

He said the FTA goes beyond tariff reductions and includes areas such as trade in goods and services, digital trade, telecom, financial services, intellectual property rights and regulatory practices.

Highlighting India’s growing services sector, Jain said services exports have been expanding at nearly double the pace of goods exports over the past decade.

“India’s goods exports stood at USD 442 billion, while services exports reached USD 421 billion this year,” he said.

The remarks came as European industry leaders highlighted the agreement’s potential to strengthen manufacturing, investments and supply chain integration between India and the EU.

BMW Group India
President and CEO Hardeep Singh Brar said the FTA could transform India-EU automotive trade relations through tariff rationalisation and stronger supply chains.

“As you know, imports today attract duties of 110 per cent for cars priced above USD 40,000. In the first year after implementation, the duty could come down directly to 40 per cent,” Brar said.

He added that several European companies are increasingly looking at India as a competitive and high-quality supply chain hub.

“At the same time, clarity on implementation timelines and quota mechanisms is important, as delays could lead customers to postpone purchases in anticipation of lower prices,” he said.

Speaking at the event, Biesse India CEO Sayeed Ahmed said the agreement would support India’s manufacturing ambitions by improving access to advanced European industrial machinery.

“Europe has strengths in precision engineering, automation and advanced manufacturing technologies, which can become the backbone of India’s industrial growth,” Ahmed said.

He also noted that India is emerging as a manufacturing and export base for European companies.

“We export to nearly 80 countries from India, and around 80 per cent of what we manufacture here is designed in India and exported globally,” he said.

During the event, a report titled “Economic Footprint of EU Businesses in India” was also released. According to the study, 5,833 European Union firms are currently operating in India, generating an estimated turnover of EUR 186 billion in FY24.

The report said EU firms generated nearly 6 million jobs in India, including 3.7 million direct jobs. Goods exports linked to EU firms stood at EUR 23.5 billion in 2024.

It also noted that India-EU goods trade reached EUR 120 billion in 2024, nearly doubling over the past decade, making the EU India’s largest trading partner in goods.

-ANI