Editor’s Note
The European Union has agreed to eliminate tariffs on a wide range of Indian exports, from marine products to textiles and gems. This significant trade concession is expected to provide a major boost to key Indian industries and deepen economic ties between the two partners.
– Tariffs cut to zero on key Indian exports to the EU, including marine products (currently at up to 26%), chemicals (12.8%), plastics/rubber (6.5%), leather/footwear (17%), textiles (12%), apparel (4%), base metals (10%), and gems and jewellery (4%), among a few others.
– Indian tariffs on 30% of goods traded with EU to fall to zero immediately.
– Tariffs will be eliminated or reduced on over 90% 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 completely scraps tariffs on most industrial imports from EU, including machinery and electrical equipment (currently at 44%), chemicals (up to 22%) and pharmaceuticals (11%).
– At launch of deal, the EU will scrap all tariffs on 90% of Indian goods.
– Zero tariffs to be extended to 93% of Indian goods within seven years.
– Partial cuts and quotas for about 6% of Indian goods.
– 99.5% 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% to 0.1%.
– EU cars priced below 15,000 euros ($17,800) excluded from the deal.
– Cars above that threshold split into three segments each with quotas and separate tariffs. Tariffs on most cars cut to 30–35% at launch of deal, then phased down to 10%. Indian officials said this would be over five years while an EU official said it would be over 10.
– Electric vehicle tariff cuts begin from year five.
– Final quotas will be 160,000 internal combustion engines and 90,000 electric vehicles from the EU.
– No duty cuts outside quotas and no tariff reduction on Completely Knocked Down (CKD) kits.
– India 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 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.
– 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 between 20% and 30%, with the rate in year one at 75%. For spirits, the rate will drop from as much as 150% to 40% over seven years, and over 10 years for gin.
– Beef, rice, sugar, dairy and poultry excluded; EU food safety rules unchanged and safeguard clause to limit imports in case of market disruption.
– The EU gives India access to 144 services sub-sectors, India opens 102 sub-sectors to the EU, including financial, maritime and telecoms.
– 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 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 possibly within a year.
($1 = 0.8424 euros)
