00:00It's been described then as the mother of all deals.
00:04The leaders of India and the European Union signing in the last hour or so.
00:08A huge trade pact reached after two decades of negotiations.
00:12The deal announced then as EU leaders have headed there to rubber stamp it, if you like.
00:17They aim to help shield against challenges from the world's two leading economies, the United States and China.
00:24Well, let's get some of the reaction just before that signing.
00:26In fact, Narendra Modi, the Indian Prime Minister, spoke. Let's hear what he had to say.
00:33India and the European Union have signed a huge trade agreement.
00:40People around the world are calling it the mother of all deals.
00:49This agreement brings huge opportunities for India's 1.4 billion people
00:54and for millions of people across European countries.
01:01Well, our business editor, Sean Pellegrin, is joining me here on Saturday.
01:04Sean, just sum up for us exactly what this deal consists of, can you?
01:08It's a broad agreement to lower tariffs on most consumer and industrial goods and for both sides.
01:14This is significant when you consider that India is known to be quite a protectionist economy,
01:19famously described as the tariff king by Donald Trump.
01:23The EU Commission says the agreement will end up reducing or eliminating entirely tariffs on over 96% of EU goods exports to India,
01:33something it says no other trading partner has ever received.
01:37Let's take some product examples.
01:39Import duties on EU cars currently stand at 110%, while they would gradually move down to 10%.
01:47In terms of EU agricultural exports, there are opportunities for EU farmers as well.
01:52Indian tariffs in that sector hover over 36% on average.
01:56Well, wine duties would be cut from 150% to 75% and eventually down to 20%.
02:02Olive oil tariffs would go down to 0% from 45% after five years.
02:07EU exporters stand to save around €4 billion in tariffs per year with this deal.
02:13We're talking about the world's second and the world's fifth largest economies coming together here, aren't we?
02:18The scale of these two markets is really huge.
02:22India is the world's most populous country, obviously.
02:24And on top of that, it's a very fast-growing economy.
02:27Its GDP is over $3.4 trillion, and it's estimated to have increased by 7.4% in 2025, up from 6.5% in 2024.
02:38And except during COVID, well, growth levels have been consistently high over the past eight years or so, as you can see there.
02:45The country is currently the EU's ninth biggest trade partner.
02:49So there is a lot of room to grow there, and goods trade has already increased 90% in the last decade.
02:56Lowering tariffs means EU businesses could further benefit from that growth in economic activity.
03:02And what about India? What does it stand to get out of this?
03:05It's a similar story for India.
03:07They could see their exports to the EU boosted by as much as €50 billion by 2031.
03:12That's according to one study, with pharmaceuticals, textiles, and chemicals likely to benefit the most, all sectors which employ a huge number of people in the country.
03:21The deal says that over seven years, Indian goods will eventually face tariffs of 0% from the EU, except for, obviously, key sectors such as autos, steel, and agriculture.
03:3492% of India's exports, or tariff lines, to the EU will see reduced or eliminated tariffs.
03:40This comes at a crucial time. India's exports have been hit hard by Trump's tariffs imposed because of New Delhi's own tariffs and its purchases of Russian oil, reaching a rate of 50%.
03:52So Modi's been on a quest to diversify his trade portfolio and protect India from such punitive tariffs from the U.S.
04:00Since May last year, four deals have been struck, including the one with the EU.
04:04Agreements have been reached with the U.K., Oman, and New Zealand.
04:07And discussions are in the works with other blocs, including Mercosur in Latin America, Chile, Peru, and the Gulf Cooperation Council.
04:15And that diversification is what the EU has been doing as well.
04:19We saw it with a deal struck with the Mercosur bloc earlier this month.
04:22It's also about more than just trade.
04:24It's about the kind of world these two powers say they want to live and work in,
04:29one that's still governed by the free trade ideals which Donald Trump has sought to dismantle.
04:35Ursula von der Leyen underlined it when she said,
04:38we've sent a signal to the world that rules-based cooperation still delivers great outcomes.
04:44Charles, thanks very much.
04:44Charles Pellegrin analyzing that deal for us from the business perspective, of course.
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