The European Union and India are set to announce on Tuesday the conclusion of a long-awaited trade deal to strengthen economic ties and counter US President Donald Trump’s tariffs.
European Commission President Ursula von der Leyen and European Council President Charles Michel witnessed the moment together in New Delhi, marking the end of nearly two decades of negotiations.
The deal was reached after years of on-and-off negotiations, reflecting the rapid shift in the global landscape under Trump’s leadership.
Although the EU has long had differences with Indian officials on trade issues, it is currently striving to reduce its economic dependence on the US and China. Similarly, India is also working to shed its protectionist image, offset the 50% tariffs imposed by the Trump administration, and balance its relations with Russia at the same time.
Amittendu Palit, the head of trade and economic research at the South Asian Institute, said that in light of the “uncertain atmosphere” brought about by Trump’s policies, countries are increasingly willing to “turn swords into ploughshares”.
The agreement will reduce tariffs on most consumer and industrial goods between India and the EU member states, but it is expected that some agricultural products will be excluded. The EU’s auto exports will also gain greater market access, but they must comply with export quotas.
The agreement is expected to be formally signed after legal review, a process that may take about six months. In addition, the European Parliament also needs to approve the agreement.
The announcement made by the EU on Tuesday came just days after the bloc finally reached a long-awaited trade deal with Mercosur, the South American trading bloc, which was aimed at helping the EU reduce its reliance on the US and China. However, the deal has yet to be approved by EU lawmakers.
According to a joint statement seen by Bloomberg News, after a meeting between Canadian Energy Minister Tim MacLeod and Indian Oil and Gas Minister Hardeep Singh Puri, Ottawa committed to sending more crude oil, liquefied natural gas and liquefied petroleum gas to India, while New Delhi will send more refined oil products to Canada.
Ministers will meet on Tuesday during the India Energy Week in Goa and use the opportunity to relaunch the “Ministerial Energy Dialogue”. This mechanism was once the main channel for energy cooperation between the two countries, but it has been stalled due to a fierce dispute triggered by the killing of a Canadian Sikh activist.
Amid the escalating trade tensions with the United States, this renewed push for export market diversification is one of the significant measures taken by Canadian Prime Minister Mark Carney to achieve this goal. It also reflects that the Carney government is turning to a pragmatic and economy-first foreign policy with major Asian partners.
