The European Union has unveiled plans for a comprehensive trade agreement with India, potentially boosting bilateral commerce to over $100 billion annually and reshaping supply chains across sectors including automotive, pharmaceuticals, and renewable energy.
- Proposed EU-India trade deal targets $100 billion in annual bilateral trade by 2030
- 95% of goods would be tariff-free within five years
- Germany and France are primary EU exporters expected to gain from reduced barriers
- Indian pharmaceutical and auto components sectors stand to see significant export growth
- Digital services liberalization and green tech investment are central pillars
- Agreement includes enforceable labor and environmental standards
The European Commission announced preliminary discussions on a landmark trade deal with India, positioning it as the most extensive economic partnership since the EU-Mercosur negotiations. The proposed framework aims to eliminate tariffs on 95% of goods traded between the two economies within five years, affecting key exports such as German automobiles, French wines, Indian pharmaceuticals, and Indian textiles. Initial projections indicate that the agreement could increase EU-India trade volume from the current $78 billion baseline to more than $100 billion by 2030. This would represent a 28% growth rate over four years, driven largely by reduced non-tariff barriers and streamlined customs procedures. Specific commitments include digital services liberalization, mutual recognition of product standards in medical devices, and joint investments in green technology infrastructure. Sectors expected to benefit most include India’s auto component manufacturers, which currently face an average 10% tariff on exports to the EU, and European agribusinesses seeking expanded access to India’s $450 billion domestic food market. Additionally, the pact includes provisions for labor and environmental safeguards, requiring both parties to uphold ILO core conventions and the Paris Agreement obligations. Market reactions have been positive, with shares of major Indian exporters like Tata Motors and Sun Pharmaceutical rising by up to 6% in early trading. European equity indices, particularly the Euro Stoxx 50, saw gains as investors priced in improved export outlooks. However, concerns persist among some domestic producers in both regions about potential job displacement and regulatory alignment challenges.