EU and India: A Trade Deal in the Making

In New Delhi's bustling Khan Market, Atul Mehra, a gem and jewelry trader, is hopeful. His business took a hit last year when the US slapped 50% tariffs on Indian goods. He's looking forward to a potential trade deal between the EU and India to boost his sales. Nearby, Vishnu Gupta, a garment shop owner, sees the deal as a chance to expand his business beyond India's borders.

A Big Deal in the Making

This week, the EU and India are meeting to finalize a free trade agreement and a new defense partnership. It's a big deal, considering the EU is the world's largest market and India is one of the fastest-growing economies. The timing is interesting, too. The US has been putting pressure on India with tariffs, while the EU is taking a different approach—offering more trade and stronger defense ties.

A Historic Summit

Before the summit, top EU officials will be guests at India's Republic Day celebrations. This is a first, and it shows just how serious both sides are about this deal. The trade agreement would create a massive market of nearly 2 billion people, accounting for a quarter of the world's GDP. That's a lot of potential for businesses on both sides.

Challenges Ahead

But it's not all smooth sailing. There are some big sticking points, like agriculture. Nearly half of India's workforce is in agriculture, and there are fears that European products could undercut Indian farmers. The EU, meanwhile, is worried about Indian agricultural exports flooding its markets. Steel is another issue, with the EU recently doubling tariffs on foreign steel, including from India.

A Determined Push

Despite these challenges, both sides are determined to make the deal work. They share common interests, like a stable international order and diversified supply chains. It's a complex negotiation, but the potential benefits are huge. For India, it's a chance to boost exports and reduce dependence on Russia for military equipment. For the EU, it's an opportunity to tap into India's growing economy and reduce reliance on other trading partners.