By Admin 
India EU Free Trade Agreement: The historic Free Trade Agreement (FTA) signed between India and the European Union on Tuesday is expected to have a wide-ranging impact on the Indian economy and consumers. Under this agreement, tariffs on about 90 percent of European products imported into India have either been completely abolished or have been drastically reduced, which may significantly change the nature of the Indian import market in the coming years. It is estimated that this will almost double the presence of European goods in the Indian market and will save about 4 billion euros annually.
What is the impact on pharmaceuticals sector?
Especially the pharmaceutical and healthcare sector will get a big benefit from this, because the 22 percent tariff on chemicals and 11 percent tariff on medicines has been reduced to zero. Apart from this, duty on products like medical, surgical instruments and spectacles has also been reduced by 90 percent, which will reduce the cost of hospitals and treatment can become cheaper for the common people.
According to the Indian Commerce Ministry, the EU will cut customs duties on 99.5 percent of India’s exports over the next few years, including key sectors like marine products, leather, textiles, chemicals, rubber and gems and jewellery. This agreement, reached after two decades of long negotiations, is being considered the biggest trade agreement ever, which will create a common market of about two billion people.
Within three to four years of its implementation, bilateral trade is likely to exceed $200 billion and trade in services is likely to reach $125 billion. India is also expected to gain big in sectors like IT, professional services, education, finance, tourism and manufacturing, especially at a time when India is exploring new global trade options due to high tariffs imposed by the US.
Common market of 2 billion people
Indian exporters are expected to get huge benefits as soon as the free trade agreement with the European Union is implemented. Under the agreement, the EU will completely eliminate import duties on about 90 percent of Indian goods on the very first day, while duties on the remaining about three percent of goods will be phased out over the next seven years.
News agency PTI quoted officials as saying that in this way the EU is giving concessions to India on about 99.5 percent of the trade value. It is believed that this agreement will be formally signed by the end of this year and it is likely to come into force in early 2027, although some provisions may come into effect from the beginning of next year.
On the other hand, India will also make major concessions to the EU, but this process will be relatively slow. India will give duty-free access to about 93 percent of EU goods over the next ten years, while duties will be removed on only 30 percent of European goods on the first day of the agreement.
Apart from this, India will also give duty concessions and quota-based reductions on 3.7 percent of trade value to the EU. Overall, India will receive duty relief on approximately 97.5 per cent of the trade value to the EU, providing a strong long-term basis for trade and investment between the two economies.
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