The President of the European Commission, Ursula von der Leyen, said Tuesday that the European Union (EU) is “on the cusp” of signing a trade deal with India, giving the 27-member bloc the “first mover advantage”.
This comes as India’s long-pending trade deal with the US remains uncertain, and in the backdrop of renewed US threats of high tariffs on the EU over Greenland and a 50 per cent duty on Indian goods since August last year.
“Right after Davos, next weekend, I will travel to India. There’s still work to do, but we are on the cusp of a historic trade agreement.
Indeed, some call it the mother of all deals. One that would create a market of two billion people, accounting for almost a quarter of global GDP, and crucially, that would provide a first mover advantage for Europe with one of the world’s fastest growing and most dynamic continents,” she said in a speech at Davos.
She said Europe wants to do business with the “growth centres” and the economic powerhouses of this century, from Latin America to the Indo-Pacific. “Europe will always choose the world and the world is ready to choose Europe,” she said, while criticising the proposed US tariffs on the EU.
Both Ursula von der Leyen and the President of the European Council, Antonio Luís Santos da Costa, will be the chief guests at the Republic Day celebrations next week. They will also co-chair the 16th India-EU Summit on January 27.
Last week, Commerce Minister Piyush Goyal, too, had termed the upcoming India-EU trade agreement as the “mother of all trade deals”. The deal, which is expected to be signed on January 26, will be “comprehensive” in nature and take care of the interests and sensitivities on both sides, he had said.
The India-EU trade agreement has been decades in the making. Both countries have finally come close to signing the agreement after talks were re-launched in July 2022. While negotiations first began in 2007, the talks were abandoned in 2013.
However, the talks seem to have gathered urgency after the Trump administration changed its trade policies, ramping up protectionist measures, forcing trade partners to explore newer markets.
Story continues below this ad
A key driver of the trade deal has also been the shared challenge of China. Indian industry has been encountering pricing challenges, especially while trying to scale up the solar energy sector. The EU is concerned about China’s dominance in critical technologies, as China holds a leading global manufacturing position in several areas, exposing the EU to potential risks.
While India is aiming to gain market access in labour-intensive sectors such as textiles, footwear, gems and jewellery, the EU is expected to get market access for its automobiles and beverages.
Commerce Secretary Rajesh Agarwal said last week that India has made considerable progress in its trade deal negotiations with the EU, with the two sides signing as many as 20 of the 24 chapters and aiming to reach a deal before the EU leaders’ visit later this month.
