EXCLUSIVE: How much impact will the India-EU FTA have on the economy? FM Sitharaman EXPLAINS | Watch Video

The proposed India-EU Free Trade Agreement is expected to give a boost to exports and investor confidence, especially in labour-intensive sectors, with Finance Minister Nirmala Sitharaman saying the deal will strengthen India’s traditional trade ties with Europe during an interview with ET Now.She said, "it (India-EU FTA) will have an impact because our exports have traditionally had a very strong European market. In some items, after the withdrawal of Generalised System of Preferences (GSP) benefits, our competitive edge was dulled. Bangladesh benefited from such GSP treatment and as a result, its textile exports multiplied.""However, this did not deter our exporters -- we continued exporting. A trade deal would have given more confidence, which we believe industries have now gained after the signing of the agreement. Particular sectors that are labour intensive will benefit because they are product that are much sought after -- our marine products, textiles, footwear, sports goods, our cars and so on," she added.India-EU FTAThe long-awaited India-European Union Free Trade Agreement (FTA) has finally been sealed, and it arrives at a moment when global commerce is facing fresh uncertainty. The India-EU deal is being described by policymakers as one of the most important economic pacts in recent years.Mother of all Trade AgreementsOften referred to as the 'mother of all trade agreements,' the FTA was finalised after nearly 18 years of negotiations. Once the legal text is completed and approved by the European Parliament, the agreement will be formally signed. The EU is already India’s largest trading partner as a bloc, while the US remains India’s biggest single-country partner. The timing of this deal reflects a broader effort by both sides to reduce dependence on volatile markets and create reliable trade channels.Talks had dragged on for years mainly because of differences over non-trade issues such as labour standards, sustainability and regulatory norms. However, momentum picked up recently as global trade became more protectionist. Exporters on both sides now see the agreement as a way to expand into new markets and shield themselves from sudden tariff shocks.India-US trade dealUS President Donald Trump has agreed to a trade deal with India, lowering tariffs on Indian exports from 25 per cent to 18 per cent, following a phone call with Prime Minister Narendra Modi.US President Donald Trump posts on Truth Social, "It was an honour to speak with Prime Minister Modi. He is one of my greatest friends and, a Powerful and Respected Leader of his Country. We spoke about many things, including Trade, and ending the War with Russia and Ukraine. He agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine, which is taking place right now, with thousands of people dying each and every week! Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%.""They will likewise move forward to reduce their Tariffs and Non Tariff Barriers against the United States, to ZERO. The Prime Minister also committed to "BUY AMERICAN," at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products. Our amazing relationship with India will be even stronger going forward. Prime Minister Modi and I are two people that GET THINGS DONE, something that cannot be said for most," Trump added.https://youtu.be/S0dkvPRaQkM?si=JqOoGiivrhvvBgsH