From Tariffs To Market Access: How India-EU Trade Deal Will Benefit Exporters

India and the European Union have concluded negotiations on a long-awaited free trade agreement as both sides seek to cushion the impact of strained ties with the United States.

The pact paves the way for freer trade in goods and services between the 27-nation EU and India, together representing a market of roughly 2 billion people.

Key details of the deal include:

BENEFITS FOR EU EXPORTERS:

• Indian tariffs on 30 per cent of goods traded with the EU to fall to zero immediately
• Tariffs will be eliminated or reduced on over 90 per cent of EU exports
• EU firms to save up to 4 billion euros ($4.74 billion) a year in duties
• Improved access for EU firms in financial and maritime services
• Simplified customs rules and stronger intellectual property protection
• India's duties on vehicles imported from the EU are to fall from 110 per cent to 10 per cent over five years, under a 250,000-vehicle annual quota, likely benefiting Volkswagen, BMW, Mercedes-Benz and Renault.
• India completely scraps tariffs on most industrial imports from the EU, including machinery and electrical equipment (currently at 44 per cent), chemicals (up to 22 per cent) and pharmaceuticals (11 per cent)

BENEFITS FOR INDIAN EXPORTERS:

At the launch of the deal, the EU will scrap all tariffs on 90 per cent of Indian goods

Zero tariffs to be extended to 93 per cent of Indian goods within seven years

Partial cuts and quotas for about 6 per cent of Indian goods

99.5 per cent of bilateral trade receives some form of tariff concession

India to keep autos and agriculture out of full tariff elimination

EU's average tariff rate falls from 3.8 per cent to 0.1 per cent.

Tariffs cut to zero on key Indian exports to the EU, including marine products (currently at up to 26 per cent), chemicals (12.8 per cent), plastics/rubber (6.5 per cent), leather/footwear (17 per cent), textiles (12 per cent), apparel (4 per cent), base metals (10 per cent), and gems and jewellery (4 per cent), among a few others.

CARS: QUOTAS AND EXCLUSIONS

EU cars priced below 15,000 euros ($17,800) are excluded from the deal

Cars above that threshold are split into three segments, each with quotas and separate tariffs. Tariffs on most cars cut to 30–35 per cent at launch of deal, then phased down to 10 per cent over five years

Electric vehicle tariff cuts begin from year five

No duty cuts outside quotas and no tariff reduction on Completely Knocked Down (CKD) kits

STEEL AND CARBON RULES

India is seeking improved access to tariff-free EU steel import quotas as an FTA partner, with the outcome due by June 30, ahead of EU rules taking effect on July 1

No India-specific exemption from the EU's carbon duties, though India says it can negotiate if the EU grants flexibility to any other nation

A technical group will help Indian firms verify carbon footprints, alongside a separate agreement to ensure EU technical and financial support to help emission cuts in India

AGRICULTURE: ACCESS WITH SAFEGUARDS

Indian tariffs on EU agri-food exports that attracted average duties of over 36%, cut or removed

Sharp cuts on tariffs on EU wines, spirits, beer, olive oil, processed foods and some fruits

Indian duties on premium wine will gradually fall from 150% to as low as 20%

Beef, rice, sugar, dairy and poultry excluded; EU food safety rules unchanged

SERVICES, SUSTAINABILITY, DIGITAL TRADE

The EU gives India access to 144 services sub-sectors, and India opens 102 sub-sectors to the EU, including financial and maritime

Binding rules set on labour rights, environment, women's empowerment and climate cooperation

Digital trade rules to support business while protecting privacy, security and public policy

RULES AND NEXT STEPS

Rules of origin prevent third-country goods routing through India for tariff benefits

Disputes handled by independent panels with binding rulings

Draft texts to be published, followed by legal review, translation and approval by EU governments, the European Parliament and India, expected within a year.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)