New Delhi (AFP) – European Council president Antonio Costa arrived in India on Sunday as the EU and New Delhi seek to seal a free trade pact, capping nearly two decades of negotiations between the economic behemoths. Costa and European Commission president Ursula von der Leyen are chief guests for this year’s Republic Day celebrations in New Delhi on Monday, before an EU-India summit the next day where they hope to shake hands on an accord described as the “mother of all deals.”
“The summit will be an opportunity to build on the EU-India strategic partnership and further strengthen collaboration across key policy areas,” the EU Council said on X. India, the world’s most populous nation, is on track to become its fourth-largest economy this year, according to International Monetary Fund projections. The EU eyes India as an important market for the future, while New Delhi sees the European bloc as an important source of much-needed technology and investment to rapidly upscale its infrastructure and create millions of new jobs.
“The EU stands to gain the highest level of access ever granted to a trade partner in the traditionally protected Indian market,” von der Leyen said on Sunday, adding that she expected exports to India to double. “We will gain a significant competitive advantage in key industrial and agri-good sectors.” Bilateral trade in goods reached 120 billion euros ($139 billion) in 2024, an increase of nearly 90 percent over the past decade, according to EU figures, with a further 60 billion euros ($69 billion) in trade in services.
The pact would be a major win for Brussels and New Delhi as both seek to open up new markets in the face of US tariffs and Chinese export controls. “The EU and India are moving closer together at the time when the rules-based international order is under unprecedented pressure through wars, coercion and economic fragmentation,” Kaja Kallas, the EU’s top diplomat, said on Wednesday.
However, ongoing negotiations are focusing on a few sticking points, including the impact of the EU’s carbon border tax on steel exports, according to people familiar with the discussions. New Delhi, which has relied on Moscow for key military hardware for decades, has tried to cut its dependence on Russia in recent years by diversifying imports and pushing its own domestic manufacturing base. Europe is doing the same with regard to the United States.
© 2024 AFP
