India–EU FTA: Top winners and losers of the 'mother of all trade deals'

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NEW DELHI: India and the European Union connected Tuesday announced the decision of negotiations for a landmark escaped commercialized statement (FTA), ending talks that began astir 2 decades ago.The "mother of each deals" is India’s 19th commercialized statement and is expected to importantly boost exports to the 27-nation EU bloc portion reshaping contention for respective home industries.The statement comes astatine a clip erstwhile planetary commercialized flows person been disrupted by precocious US tariffs, fragile proviso chains and geopolitical tensions, including the Russia-Ukraine war.India is presently facing steep tariffs from the US, portion the EU is besides nether menace of higher American duties.

What the woody covers

Under the FTA, duties volition beryllium chopped connected 99.5% of goods exported from India to the EU, including seafood and footwear.
In return, India volition trim oregon destruct tariffs connected 96.6% of goods imported from the EU, including phased cuts for European carmakers and intoxicant producers.
Once implemented, the pact volition make a combined marketplace of astir 2 cardinal people, spanning the world’s fourth-largest system (India) and the second-largest economical bloc (EU).
Indian apparel manufacturers and gems and jewellery exporters are among the biggest gainers, arsenic EU duties connected these products volition beryllium chopped to zero.
Domestic nutrient producers volition besides get preferential entree to the European market.
However, Indian automakers and liquor companies are expected to look stiffer contention arsenic little import levies marque European products cheaper.

India EU trade

As companies await much details, here’s a look astatine who stands to summation and and who whitethorn lose:

Big winners

Apparel & textiles

India gains contiguous zero-duty entree to a $263 cardinal European textile market. The authorities said tariffs connected textile imports volition beryllium eliminated immediately. CareEdge Ratings called the woody "critical" for improving competitiveness, estimating India could rise its EU marketplace stock to 9% from 5%, adding astir $4.5 cardinal successful yearly exports implicit the mean term.Textile stocks reacted sharply, with KPR Mill, Welspun Living, and Kitex Garments posting beardown gains, Bloomberg reported.

Leather & footwear

Tariffs connected leather and footwear person been slashed to zero from 17%, opening up a $100 cardinal EU marketplace for Indian exporters.

Gems & jewellery

The EU has granted duty-free entree to Indian gems and jewellery. Kirit Bhansali, president of the Gem & Jewellery Export Promotion Council, said bilateral commercialized could treble to Rs 910 cardinal successful the adjacent 3 years."This timely pact volition assistance Indian exporters salvage mislaid ground," helium said, noting that exports to the US person fallen sharply.

Food products & seafood

Indian exporters of shrimp, frozen food and value-added seafood products volition get preferential entree to the EU market. Producers of tea, coffee, spices, grapes and processed nutrient volition besides benefit, portion safeguards stay successful spot for delicate sectors similar dairy and poultry.

Benefits for India

Preferential entree crossed 97% of tariff lines, covering 99.5% of commercialized value.
Immediate work elimination for labour-intensive sectors specified arsenic textiles, leather, gems and jewellery.
Zero-duty introduction for $33 cardinal worthy of exports presently facing EU tariffs of 4–26%.
Sensitive sectors similar dairy, cereals and poultry are protected.

Losers

Trade without Trump

The "mother of each deals" comes astatine a captious infinitesimal for the planetary economy, which has been unsettled by the unpredictable commercialized and tariff policies of US President Donald Trump.The landmark India–EU commercialized pact is expected to trim some sides’ dependence connected the United States and China.Negotiations, which began astir 2 decades ago, gained momentum aft tariffs imposed by the Trump medication connected Indian and European goods disrupted planetary commercialized flows.The Trump medication has openly criticised the agreement. Earlier, US Treasury Secretary Scott Bessent alleged that Europe was efficaciously bankrolling the Russia-Ukraine warfare by purchasing vigor products routed done India.He argued that European countries were weakening their ain information by importing refined substance from India that originates from Russian crude oil, portion Washington imposed steep tariffs connected Indian exports implicit New Delhi’s vigor ties with Moscow."We person enactment 25 per cent tariffs connected India for buying Russian oil. Guess what happened past week? The Europeans signed a commercialized woody with India," Bessent said.However, Commerce Minister Piyush Goyal has dismissed suggestions that US tariffs played a relation successful pushing the woody forward, saying, "I don’t deliberation we adjacent discussed this."

India's goods export to EU

Liquor makers

India has sharply chopped tariffs connected European alcohol. Duties connected vino person been reduced to 20%, spirits to 40% (from arsenic precocious arsenic 150%), and brew to 50%.This is expected to intensify contention for Indian liquor firms. "It’s a antagonistic for Indian liquormakers," said Karan Taurani of Elara Securities. Shares of Sula Vineyards, United Breweries, and Radico Khaitan fell aft the announcement.
Indian carmakers
The pact allows up to 250,000 European vehicles to participate India astatine preferential rates, with tariffs gradually dropping from 110% to arsenic debased arsenic 10%.

Duties connected car components volition besides beryllium scrapped implicit 5–10 years.Shares of Mahindra & Mahindra and Tata Motors Passenger Vehicles slipped pursuing the news.

Why the woody matters

Signed aft astir 2 decades of negotiations, the statement marks India’s astir ambitious commercialized pact truthful acold and is acceptable to reshape proviso chains, pricing powerfulness and maturation prospects crossed sectors. "Textiles, gems and jewellery, leather, pharma, and high-tech engineering" volition payment from the deal, Munjal Almoula, managing spouse for Tax & Regulatory Advisory astatine BDO India told Bloomberg.India’s goods commercialized with the EU stood astatine $136.5 cardinal successful 2024-25, making the bloc its largest trading partner. The FTA is expected to beryllium signed aboriginal this year, pursuing ineligible vetting and support by the European Parliament.

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