<h6><strong>Eduardo González/Ane Barcos</strong></h6> <h4><strong>Foreign Minister José Manuel Albares welcomed the signing of the free trade agreement between the European Union and India on Tuesday, January 27, because it will help “avoid trade coercion” by the United States.</strong></h4> The European Union and India announced the conclusion of negotiations for their free trade agreement, which is expected to boost EU exports to the Indian market by eliminating or reducing tariffs on more than 90 percent of products exported from Europe. This agreement, which was announced on Monday in New Delhi during the sixteenth bilateral summit, could generate savings of up to four billion euros annually in tariffs on European products. “In today’s world, Europe must diversify its trade partners,” Albares stated in an interview with Radio France International (RFI). Therefore, the agreement with India “is a way to avoid trade coercion” and will serve to “tell those who believe that tariffs are the future, like the new American administration, that we Europeans continue to believe in free trade, we will protect our markets, we will protect our consumers, and we will protect our companies.” The signing of the agreement took place five days after Albares' official visit to India, during which, in addition to expressing his desire for the bilateral relationship to be elevated to the level of a "strategic partnership," the highest level of relationship between two states (similar to those Spain already has with countries like China, Brazil, Egypt, Jordan, and Qatar), he highlighted the imminent conclusion of negotiations for the Free Trade Agreement (FTA) between India and the European Union, which will create "the largest free trade area in the world." "We are talking about 2 billion people, and therefore, if Mercosur was extraordinary news just a few days ago, everything indicates that, in just a few days, we will have another piece of news of the same magnitude, and that represents a great opportunity for European companies, including Spanish ones," added Albares, who took advantage of the trip to discuss with "the main Spanish companies" based in India the opportunities arising from the "fall of tariff barriers." <h5><strong>Von der Leyen, Costa and Modi</strong></h5> The President of the European Commission, Ursula von der Leyen, expressed her satisfaction upon confirming the conclusion of the agreement, which reflects “the story of two giants: the second and fourth largest economies in the world, who choose collaboration in a true spirit of mutual benefit.” She added that the EU-India free trade agreement sends “a powerful message: cooperation is the best response to global challenges.” For his part, the President of the European Council, António Costa, emphasized the importance of trade as “a crucial geopolitical stabilizer and a fundamental source of economic growth.” According to Costa, trade agreements strengthen the rules-based economic order and promote shared prosperity. In this context, he emphasized that the free trade agreement reached is of “historic importance” and affirmed that, in a multipolar world, the European Union and India are working together to expand spheres of shared prosperity. Indian Prime Minister Narendra Modi stated that this is the “largest trade agreement in India’s history” and that it “will facilitate access for Indian products to European markets,” which will benefit Indian farmers and small businesses. He also noted that it will open “new opportunities in the manufacturing sector” and strengthen cooperation in services between the two blocs. The Prime Minister further stressed that the agreement “will encourage investment and promote innovative partnerships,” which will contribute to strengthening global supply chains. In this regard, he emphasized that the agreement is not limited to trade but establishes a “roadmap for shared prosperity.” <h5><strong>The agreement</strong></h5> The agreement extends preferential access to the Indian market for several service sectors, such as financial services and maritime transport, which will receive significant openings. According to Von der Leyen, this will generate new business opportunities and contribute to job creation in both blocs. Furthermore, EU industrial sectors will benefit from the reduction or elimination of tariffs on key products, such as machinery, chemicals, pharmaceuticals, and automobiles. Specifically, tariffs of up to 44% will be eliminated on machinery and electrical equipment, up to 27.5% on optical, medical, and surgical equipment, and up to 22.5% on chemicals and precious metals. In the case of automobiles, India will reduce tariffs from 110% to 10% with an annual quota of 250,000 vehicles, representing a substantial improvement in market access. Brussels also asserted that the agreement will benefit European farmers by eliminating or reducing tariffs on agri-food products that currently face high tariffs, such as wines, which can reach up to 150%. Premium wines, for example, will see tariffs reduced to 20%. Significant reductions will also apply to products such as olive oil, fruit juice, and other processed goods, opening up new opportunities for EU farmers in India. One chapter of the agreement is dedicated to facilitating access to the Indian market for small and medium-sized enterprises (SMEs), establishing specific contact points that will allow these companies to access information on how to do business in both markets. Tariff reductions, the elimination of regulatory barriers, and regulatory stability will help SMEs export and import more easily, affordably, and efficiently.
