India-EU FTA: Cheaper cars, investment, millions of jobs; Know major benefits of India-EU deal

New Delhi: The deal between India and the European Union has been announced. The Free Trade Agreement (FTA) between India and the European Union was officially sealed on January 27. Prime Minister Narendra Modi said that the historic trade agreement, which had been stalled for decades, has finally been completed.

Under this deal, both sides have agreed to open their markets to each other. Tariffs will be reduced or eliminated on up to 90 percent of products. This move will make European products cheaper in India. At the same time, India's exports to Europe will increase. Let's look at the benefits of this India-EU deal.

What be the effect on Indian exports?

Following this deal, exports between India and the European Union will increase rapidly. Tariffs on textiles, ready-made garments, leather, jewelry, pharmaceuticals, and engineering goods will be reduced, leading to rapid market growth in Europe. It is estimated that the Free Trade Agreement will increase India's exports by $50 billion by 2031.

What will India receive?

This agreement also includes 500 million Euros in assistance from the EU to help India reduce greenhouse gas emissions and accelerate the green transition over the next two years. This will be a significant boost for India's green sector.

How will Indian exports improve?

After the free trade deal, Indian products will be available at cheaper prices in Europe, giving tough competition to countries like China, Bangladesh, and Vietnam. India will also supply a greater variety of products to Europe.

Will it boost investment?

This move will lead to large-scale European investment in India. Companies from countries like Germany, France, and Italy may increase their investments in India, which could be a major achievement for India in the manufacturing, green energy, automotive, and semiconductor sectors. This will open up new employment opportunities, with estimates suggesting millions of direct and indirect jobs will be created. This will support India's Make in India mission.

How will it benefit the Service Sector?

Under the Free Trade Agreement, Indian markets will have easier access to IT, software, fintech, and professional services. This will also create new investment opportunities in this sector. In the long term, it will also increase strategic and economic strength.

Will it focus on Machinery, Chemicals, and Pharmaceuticals?

The European Union has stated that tariffs on machinery will be largely eliminated (up to 44%), on chemicals (up to 22%), and on pharmaceuticals (up to 11%). This will make medicines cheaper, and medical and other machinery products more affordable. This will strengthen the industrial sector.

How will it affect the automobile industry?

For Indian consumers and the auto industry, the most attention-grabbing part of this announcement is the reduction in car tariffs. The European Union says that tariffs on cars will gradually decrease to 10%, with a quota of 250,000 vehicles per year. This means that only the first 250,000 vehicles imported annually under the agreement will be eligible for the reduced tariff benefit.

What will become cheaper?

Tariffs have been reduced on up to 90% of European Union products, which means these products will become cheaper. Alcohol, Beer, Wine

Tax on EU wine reduced to 20–30%

Tax on EU spirits 40%

Tax on EU beer 50%

Food and Beverages

Tariffs completely eliminated on olive oil, margarine, and vegetable oil

Cars

Tax gradually reduced to 10%

Annual limit of 250,000 cars

Medical and Surgical Equipment

Taxes eliminated on 90% of products

Medical and diagnostic equipment becomes cheaper

Services

Easier entry for EU financial and maritime companies into India

Services like banking and shipping may become cheaper/easier