New Delhi

India’s proposed Free Trade Agreement with the European Union could emerge as one of the largest trade agreements in the world, covering nearly one-third of global trade and impacting around two billion people, according to Darpan Jain, Additional Secretary in the Department of Commerce.

Speaking at a Federation of European Business in India event titled “Decoding EU-India FTA,” Jain described the proposed pact as the “mother of all deals,” noting that it would account for almost one-fourth of global GDP and nearly USD 11 trillion in trade.

He explained that the agreement is expected to be broad-based and extend well beyond tariff reductions. Areas under discussion include trade in goods and services, digital commerce, telecommunications, financial services, intellectual property rights, and regulatory frameworks.

Highlighting India’s changing trade profile, Jain said services exports have been expanding at nearly twice the pace of merchandise exports over the past decade. He noted that India’s goods exports stood at USD 442 billion this year, while services exports reached USD 421 billion.

Industry leaders at the event stressed that the agreement could significantly strengthen investment, manufacturing, and supply chain integration between India and Europe.

Hardeep Singh Brar, President and CEO of BMW Group India, said the FTA could reshape automotive trade relations between India and Europe through tariff rationalisation and deeper supply chain cooperation. He pointed out that import duties on premium cars priced above USD 40,000 could fall sharply from the current 110 per cent to 40 per cent in the first phase of implementation.

Brar also said that European manufacturers increasingly view India as a competitive and high-quality sourcing hub for automotive components and manufacturing. However, he emphasised the need for clarity regarding implementation schedules and quota arrangements, warning that delays could lead customers to postpone purchases in anticipation of lower prices.

Meanwhile, Sayeed Ahmed, CEO of Biesse India, said the trade agreement would help advance India’s manufacturing ambitions by improving access to advanced European industrial machinery and automation technologies. He added that India is steadily becoming a manufacturing and export base for European companies, with a significant portion of products designed and produced locally for global markets.

During the event, a study on the “Economic Footprint of EU Businesses in India” was also released. According to the report, 5,833 European firms are currently operating in India, generating an estimated turnover of EUR 186 billion in FY24.

The study further stated that EU companies support nearly six million jobs in India, including 3.7 million direct jobs, while exports linked to these firms reached EUR 23.5 billion in 2024.

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It also noted that trade in goods between India and the European Union touched EUR 120 billion in 2024, nearly doubling over the past decade and making the EU India’s largest trading partner in goods.