The EU and India have concluded talks on a free-trade agreement that will see tariffs cut or removed on a range of food and drink products.
In a statement today (27 January), the European Commission said the proposed deal was “the most ambitious trade opening that India has ever granted to a trade partner”.
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Both countries began talks on a FTA nearly 20 years ago. The negotiations were paused in 2013 and resumed in 2022.
“We have delivered the mother of all deals,” European Commission President Von der Leyen said in a statement today (27 January).
A range of agri-food products will see tariffs either removed or significantly reduced under the proposed deal.
Von der Leyen said the agreement represented “a strong message that cooperation is the best answer to global challenges” and added: “This trade deal will integrate further our supply chains and strengthen our joint manufacturing power.”
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By GlobalDataIndian Prime Minister Narendra Modi described the agreement as “historic” and “a new blueprint for shared prosperity.”
He added the deal “will facilitate access to the European market for our farmers and small industries, create new opportunities in manufacturing, and further strengthen cooperation between our services sectors”.
Indian tariffs on EU wine will be reduced from 150% to 20-30%, depending if products are marketed in the “medium” or “premium range”.
EU exports of spirits to India, which have previously seen tariffs of up to 150%, will now be subject to 40% tariffs.
EU beer, meanwhile, will see a 110% tariff brought down to 50%.
A 55% tariff on the bloc’s exports of fruit juices and non-alcoholic beers to India has also been scrapped.
Both nations are also still negotiating on a separate deal for Geographic Indications (GIs), the Commission said.
The deal also creates a “working group” for the spirits and wine sectors to allow the EU and India “to exchange information and cooperate, for example on oenological practices”.
In a statement, trade association SpiritsEurope described the FTA as “transformational” for EU spirits.
“This agreement is a real game changer for our sector,” said SpiritsEurope director general Mark Titterington.
“Cutting tariffs from 150% to 40% will unlock long-term growth, create new jobs across the value chain, and give Indian consumers greater choice through a complementary, rather than competing, offering.
“The deal benefits both sides: a stronger EU presence will support market diversification, boost revenues, attract investment, and generate downstream employment in India, without displacing domestic production.”
Just Drinks has also asked EU wine trade group Comité Européen des Entreprises Vins for comment.
On the food side, olive oil, margarine and vegetable oils from the EU will no longer face Indian tariffs and nor will prepared goods such as breads, pastries, pasta, biscuits and pet food.
Sheep meat will also have its 33% tariff removed, while sausages and other prepared meats will see a 110% tariff reduced to 50%.
Kiwis and pears, which also previously faced a 33% tariff, now see this cut to now 10% “in-quota”.
The Commission said it has still maintained its duty on “sensitive products”, including rice, beef, chicken meat, milk powder, bananas, honey and ethanol.
It added it will open “calibrated quotas” for imports of goods like grapes, sweetcorn, sheep and goat meat, as well as rum made of molasses and starches.
The deal also includes “a bilateral safeguard mechanism”, which will give a “targeted response” in case the deal causes market disruption.
Reflecting on the FTA, EU industry association FoodDrinkEurope said: “Overall, the outcome represents a key milestone and positive development for EU food and drink. While tariff reduction and elimination are a concrete and almost immediate benefit of the agreement, FoodDrinkEurope recognises that these alone are not sufficient to fully unlock the potential of this market.
“We welcome the platforms for dialogue and cooperation that will be set up under the FTA to address non-tariff barriers and strengthen regulatory cooperation. Given the complexity of the Indian market, the proper functioning of these platforms will be essential to allow EU food and drink operators to reap the full benefits of the agreement.”
For the proposed deal to come into force, the Commission must next present the negotiated draft texts on the agreement to the European Council. Following Council’s approval and signing by the EU and India, the proposal would need to be approved by the European Parliament before it is finally ratified by the Council and again by India.
EU farm lobby Copa-Cogeca also welcomed the announcement of the deal, noting it “strengthens access to a key growth market while clearly recognising the need to protect the most sensitive sectors of European agriculture and its production model”.
It said that through significant reduction or removal of earlier “prohibitive tariffs” on “a targeted range” of goods, “the agreement creates meaningful new export opportunities for competitive EU farmers and agri-cooperatives”.
Copa-Cogeca also stressed “the importance of safeguarding strong food safety and production standards and further strengthening collaboration on sanitary and phytosanitary matters as well as on sustainable food systems, under the SPS and SFS chapters that this agreement features”.
It added: “In this context, the effective implementation of the agreement must guarantee reciprocity of production standards for agri-food products placed on the EU market, to ensure fair competition for EU farmers and maintain consumer confidence.
“The on-going negotiations on Geographical Indications Agreement, should swiftly further reinforce the outcome of this agreement, by supporting our value-added agricultural products and protecting Europe’s quality schemes in the Indian market.”
