00:00Let's bring you some other world news on the programme.
00:03And after almost two decades of negotiation,
00:05India and the European Union have now finalised a landmark free trade agreement.
00:10The European Union president, Ursula von der Leyen,
00:12described it as the mother of all deals, creating a market of two billion people.
00:18Well, New Delhi and Brussels are both hoping that this pact will help shield
00:21against challenges from the world's two biggest economies, the United States and China.
00:26Well, here's a little then from that European delegation speaking earlier on today in New Delhi.
00:33We did it. We delivered the mother of all deals.
00:39We are creating a market of two billion people,
00:43two giants who choose partnership in a true win-win fashion.
00:49A strong message that cooperation is the best answer to global challenges.
00:55Today is a historic moment.
00:59We are opening a new chapter in our relations on trade, on security, on people-to-people ties.
01:09I'm the president of the European Council, but I'm also an overseas Indian citizen.
01:17We're covering the events for us from New Delhi.
01:23The Indian capital is our correspondent, Navidita Kumari.
01:26Here's a little from her.
01:28There was a setback for export-oriented Indian companies
01:32after the punishing tariff by Trump administration,
01:36which was up to 50 percent, particularly textile and garment industry,
01:43that is the second largest employer in India,
01:46was struggling and seeking to diversify their export destinations
01:51and make new clientele to offset after the tariffs put by the U.S. administration.
01:59They are particularly happy and welcoming this deal.
02:03And they say that this will make up for the losses and the job cuts
02:08which they had to go through after the U.S. tariffs were imposed in India.
02:14So they are welcoming the deal.
02:16And it's definitely a win-win situation for both sides
02:20at a time when Washington is targeting both India and EU with steep tariffs.
02:26That was Navidita Kumari reporting for us.
02:30Well, let's stay with this story now and bring in Tobias Schultz on the programme.
02:34He works as an Asia associate at the German Institute for International and Security Affairs.
02:40Hello to you and thanks very much for speaking to us here on France 24.
02:45Good afternoon.
02:46Look, this agreement, as I was saying earlier on,
02:49has been almost 20 years in the making,
02:52but talks really ramped up, didn't they, in the past six months.
02:56Why was it so important for the EU and for India to get this deal done now?
03:04Well, there are several reasons for this.
03:06And let me start by saying that after the two parties started
03:10to negotiate the trade agreement in 2007,
03:13they already halted the trade negotiations in 2012-13
03:18when they realised they could not reach an agreement.
03:21So the negotiations were restarted after the start of the full-scale invasion of Russia into Ukraine in February 2022,
03:29when both parties realised that the world is changing
03:34and that they might perhaps have underestimated the relevance of each other.
03:39So there was a geopolitical momentum that was created.
03:43And of course, China, which is kind of increasingly protectionist,
03:48and now US President Donald Trump using trade as a weapon,
03:53is and has increasingly shown to both partners, the EU and India,
03:58that they really need each other.
04:00OK, well, let's talk about the impact that this agreement is going to have then.
04:04Let's start perhaps with the Indian economy.
04:06What kind of changes will we see there?
04:08More jobs, perhaps?
04:11Well, I think the changes that we will see will be more of a long-term road that we have to observe.
04:19The EU and India currently stand at roughly 180 billion euros of annual trade.
04:27And it is only kind of increasing slowly, but with a more kind of rapid speed.
04:33And what the two leaders, Ursula von der Leyen and Narendra Modi,
04:38are now pitching is to their economies to refocus on each other.
04:45And your colleague was just speaking about the sectors that are mostly affected by the US-India trade.
04:53I mean, for India now, in terms of jewellery, in terms of textile, the EU becomes an alternative market.
05:00So there is a diversification aspect to it.
05:04And there are several Indian sectors as textiles and jewellery,
05:07but also in IT, in different kinds of services, in pharma,
05:14where India will increasingly look to kind of gain ground on the European market.
05:19And same question then for the EU economy.
05:22What sectors stand to gain?
05:26Well, I think that really depends on which countries you certainly look at.
05:31So if you look at the kind of German industries, I think many will kind of look very closely
05:37on the situation of cars, which have been facing 110% of tariffs in India.
05:43And the trajectory now is that they go down to 10%.
05:47So this is, of course, a dramatic change, and it will open many opportunities.
05:53The same is true for wine, which has been facing 150% tariffs in India.
06:01And there is now a route to reduce the wine tariffs down to 20%, 30% in the next year.
06:10So there are kind of, of course, great developments in these areas.
06:15In some areas, the percentage is, of course, far less.
06:19But it is very clear, as you pointed out in your introduction,
06:22that there are now markets bringing together around 2 billion people
06:28that will look at each other in very different and diverse sectors.
06:33And look, over the past couple of weeks here on France 24,
06:36we've talked an awful lot about the Mercosur deal
06:39between the European Union and countries in South America.
06:42For lots of people here in Europe, particularly for farmers,
06:46that deal is a very controversial, very unpopular one.
06:50This one, though, with India,
06:52doesn't really seem to have generated the same kind of concerns.
06:56Do you have a sense as to why?
07:00Yeah, the key reason why the India deal is, in general,
07:05more popular within different European party families
07:10is because it is clear for everyone that India matters.
07:13India is the fastest growing G20 nation.
07:17It has, every year, around 5% to 7% of annual growth.
07:22And it is clear that the Indian market is becoming increasingly important in the world.
07:28And in addition to this, we do have the geopolitical argument
07:32where India is among those middle powers, similar to the EU,
07:38that does not want to suffer in a world where imperialist policy styles
07:44are becoming more normal, conducted by some great powers.
07:51And then lastly, and perhaps most importantly,
07:55most areas within the agricultural sections of trade deals,
08:00which we do have in the Mercosur deal,
08:03are not included in the FDA between the EU and India.
08:08So, the largest parts of agriculture are excluded from the India-EU trade deal.
08:14And this, of course, excludes one of the major kind of tripping stones
08:18that was kind of relevant for the Mercosur deal.
08:22Dr. Tobias Schultz, really good to get your thoughts on this today.
08:25Thank you very much.
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