New Delhi: India and the European Union are on the cusp of a “historic trade agreement” that would create a market comprising two billion people accounting for almost a quarter of the global GDP, European Commission President Ursula von der Leyen said Tuesday.
President of the European Council, Antonio Costa and von der Leyen will be in India from January 25 to 27 to grace the Republic Day celebrations as chief guests and hold summit talks with Prime Minister Narendra Modi.
The two sides are set to announce the conclusion of negotiations on the much-awaited free trade agreement at the India-EU summit on January 27.
In an address at the World Economic Forum in Davos, von der Leyen said Europe wants to do business with the growth centres of today and the economic powerhouses of this century.
“I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP,” she said in a televised address.
“And, crucially, that would provide a first-mover advantage for Europe with one of the world’s fastest growing and most dynamic continents. Europe wants to do business with the growth centres of today and the economic powerhouses of this century,” von der Leyen said.
“From Latin America to the Indo Pacific and far beyond, Europe will always choose the world. And the world is ready to choose Europe,” she said.
The European Union is India’s biggest trade partner with bilateral trade in goods recording USD 135 billion in the financial year 2023-24. The free trade agreement is expected to significantly enhance trade ties.
The proposed agreement is expected to bring a qualitative change in deepening the overall bilateral ties in a range of sectors as well at a time the world is witnessing trade disruptions in view of Washington’s tariff policy.
Besides firming up the free trade agreement, the two sides are likely to unveil a defence framework pact and a strategic agenda at the summit.
India and the European Union have been strategic partners since 2004.
The ambitious FTA is being firmed up at a time amid increasing concerns over Washington’s trade and tariff policies which have impacted both India and 27-nation EU.
India and the EU are also expected to unveil a joint comprehensive strategic vision that will govern their relationship for the period 2026-2030.
The EU and India had first launched negotiations for the free trade agreement in 2007, before the talks were suspended in 2013 due to a gap in ambition. The negotiations. The negotiations were relaunched in June 2022.
The proposed Security and Defence Partnership (SDP) will facilitate deeper defence and security cooperation between the two sides.
The SDP will bring interoperability in the defence domain and it will open up avenues for Indian firms to participate in the EU’s SAFE (Security Action for Europe) programme, The SAFE is the EU’s Euro 150 billion financial instrument designed to provide financial support to member states to speed up defence readiness.
At the summit, India and the EU are also set to launch the negotiations for a Security of Information Agreement (SOIA). The SOIA is expected to boost industrial defence cooperation between the two sides.
PTI
