India-EU FTA emerges as India’s most wide ranging trade, boosting key sectors

The IndiaEuropean Union Free Trade Agreement FTA represents one of the most forwardlooking and wideranging concession packages India has negotiated so far highlighted a report by EY Ernst amp YoungAccording to the report the IndiaEU FTA truly represents an agreement between two economic giants It stated The IndiaEU FTA represents one of the most forwardlooking and wideranging concession packages India has negotiated this farThe report noted that the agreement has the potential to significantly impact several key sectors including automobiles defence aerospace textiles and information technologyIn the automobile sector the FTA proposes a phased reduction of import duties on completely built units CBUs from around 110 per cent to approximately 10 per cent with an annual quota of 250000 vehicles EY said this move may encourage greater competition and innovation in the Indian auto sector benefiting consumers through more choices and potentially lower pricesAdditionally lower import duties on completely knocked down CKD units at around 15 per cent are expected to support continued investments by European Japanese and Korean manufacturers in local assembly operations This is likely to strengthen domestic manufacturing generate employment and help maintain price stability for consumersOn strategic defence integration and industrial collaboration the report highlighted the Security and Defence Partnership framework under the agreement EY said the framework lays the foundation for deeper industrial collaboration between Indian and European aerospace and defence firms enabling technology exchange and improving interoperabilityLower tariffs are also expected to improve the price competitiveness of EU aerospace exports to India while supporting Indian original equipment manufacturers OEMs in building integrated supply chains with European partners The report added that the broader economic opening along with defence cooperation could accelerate localisation of critical aerospace technologies such as complex radar systems or structural assemblies through foreign direct investment and joint venturesIn the textile sector the agreement provides zero duty access to the EU market from Day 1 EY noted that this restores Indias competitiveness fully neutralising the impact of the earlier withdrawal of the Generalized System of Preferences GSP This will allow Indian textile products to enter the EU market at significantly more competitive pricesFor the IT sector the report said that seamless movement of professionals and workers across EU countries may provide faster and easier access to new markets particularly in the era of new AI technologies The agreement also creates a pathway for structured engagement on Social Security Agreements over the next five years addressing a longpending industry demand to reduce dual social security contributions India already has Social Security Agreements with 12 EU countries the report addedThe IndiaEU FTA was concluded on January 27 and it marked a watershed moment in Indias global trade strategy Both sides described this FTA as the mother of all dealsPrime Minister Narendra Modi European Commission President Ursula von der Leyen and European Council President Antonio Costa jointly announced the conclusion of the IndiaEuropean Union FTA at the 16th IndiaEU Summit held during the visit of the European leaders to IndiaThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever