Facing challenges from China and the United States, Brussels and New Delhi have sought closer ties. - Photo: AFP
NEW DELHI: The leaders of India and the European Union will announce the "mother of all deals" on Tuesday (Jan 27), when they meet in New Delhi to formalise a huge trade pact reached after two decades of negotiations.
EU chiefs and Prime Minister Narendra Modi hope the pact, which Modi said was concluded on Monday, will help shield against challenges from the world's two leading economies, the United States and China.
"People in the world are discussing this as a mother of all deals," Modi said Tuesday in the capital New Delhi ahead of a meeting with European Commission President Ursula von der Leyen and European Council President Antonio Costa.
"This deal will bring many opportunities for India's 1.4 billion and many millions of people of the EU," Modi said, adding the agreement "represents about 25 percent of global GDP, and one-third of global trade".
The EU leaders, who were guests of honour at India's Republic Day parade on Monday, will meet Modi later Tuesday morning.
The EU has eyed India -- the world's most populous nation -- as an important market for the future.
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.
- 'Highest level of access' -
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.
Under the agreement, India is expected to ease market access for key European products, including cars and wine, in return for easier exports of textiles and pharmaceuticals, among other things.
"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."
For India, it would boost sectors including textiles, gems and jewellery, and leather goods, as well as the service sector, Modi said.
For the EU, it is expected to slash tariffs on automobiles, wine and food exports to India.
Talks went down to the wire on Monday, focusing on a few sticking points, including the impact of the EU's carbon border tax on steel, according to sources familiar with the discussions.
- 'Clear choice' -
The accord comes as both Brussels and New Delhi have sought to open up new markets in the face of US tariffs and Chinese export controls.
India and the EU were also expected to conclude an accord to facilitate movement for seasonal workers, students, researchers and highly skilled professionals, and a security and defence pact.
"India and Europe have made a clear choice. The choice of strategic partnership, dialogue and openness," von der Leyen wrote on social media. "We are showing a fractured world that another way is possible."
India is on track to become its fourth-largest economy this year, according to International Monetary Fund projections.
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. - AFP
