00:00We can now bring in a Chetiji Bajpai, a senior research fellow for South Asia.
00:05In the Asia Pacific program at Chatham House.
00:07Thank you so much for joining us on the program today.
00:10Now, anyone who's traveled to India knows that if you buy olive oil or the most basic of French wine.
00:15It's going to cost you a small fortune.
00:17When will Indians start seeing the benefits of...
00:20Well, the benefits will probably...
00:25not be seen at the earliest until last year.
00:28So, you know...
00:30There are some caveats, of course, to this deal.
00:31Several politically sensitive sectors, such as agriculture...
00:35have been excluded.
00:36The deal is perhaps not as comprehensive as the EU may have liked.
00:40You know, there are fewer provisions on environmental and labor standards.
00:43And it, of course, still needs to undergo...
00:45the ratification process by India's cabinet and the European Council and Parliament.
00:49So, it is...
00:50a bit of a tricky process, as we noted by the decision to postpone the ratification...
00:55of the EU's trade deal with the Mercosur countries.
00:58So, the deal will not really come into...
01:00of course, before next year.
01:01And there are also ongoing negotiations for investment protection.
01:05and geographical indications.
01:06So, it's still a work in progress, I would say, to some degree.
01:08Now, both sides...
01:10sides seem to be eager to sell this deal as the mother of all deals, they're calling it.
01:15But one can't help but notice that they have been pushed together, the EU and India, as...
01:20they grapple with how to deal with a very unpredictable Donald Trump.
01:25Yeah, I agree.
01:26I mean, the deal needs to be viewed in a broader context.
01:28It signals a continued...
01:30commitment to trade liberalisation, both by Brussels and New Delhi, as both...
01:35faced pressure from the Trump administration's aggressive use of tariffs as a tool of US...
01:40foreign policy.
01:41But I would also add a caveat to that, that the India-EU relationship is...
01:45it's not merely a knee-jerk reaction to Trump's actions.
01:48There's been a long-standing...
01:50history of interactions between India and the European Union.
01:53The trade negotiations, as you know...
01:55have been noted, have been going on since 2007.
01:57They stalled in 2013 and resumed in 2020.
02:002022.
02:01And they both have been strategic partners since 2004.
02:04But the Trump...
02:05that factor, I think, has clearly added urgency to these interactions and helped to push the
02:10deal...
02:10over the line.
02:11And what do people in Europe gain from this deal?
02:15Well, I would argue that it is a win-win deal overall.
02:18It's going to slash...
02:19tariffs...
02:20on over 90% of EU's exports to India.
02:23The automobile sector, in particular...
02:25will be a particular beneficiary.
02:26India is the world's third largest car market after the US...
02:30and China.
02:31And we're going to see levies reduced from over 100% to...
02:35to, as we heard, less than 40%.
02:39And then there also are going to be...
02:40Tariffs on European food products, including wine, machinery, chemicals, pharmaceuticals.
02:45They're all going to be reduced or removed to some degree.
02:48Now, the EU's top brass is...
02:50In India, just a month after the Russian president, Vladimir Putin, New Delhi hasn't really turned...
02:55...him into a pariah, and it continues to do business with Moscow.
02:58Is this something that the EU is going to have...
03:00...to overlook?
03:01And does India realize its relationship with Russia has limitations?
03:05Yeah, I think you allude to what is one underlying, one of several, I would say.
03:10Underlying fault lines in the India-EU relationship.
03:12And that is, you know, both sides' relations with...
03:15...of major powers, including Russia.
03:17Russia remains a key strategic partner.
03:20...for India, both for practical and ideological reasons.
03:22Over 50% of India is in service.
03:25...notice military platforms are of Russian origin.
03:27India, given its price-sensitive and energy...
03:30...the Hungary economy, it has been heavily dependent on Russian crude oil imports.
03:34Although they have dropped...
03:35...of the last few months.
03:36But I think there is a, you know, that risk does remain...
03:40...in the relationship.
03:41That as the war potentially drags on in Ukraine, that scrutiny of the...
03:45...India-Russia relationship has, to some degree, grown.
03:50We've seen India as the second largest provider of restricted critical technologies...
03:54...to Russia after...
03:55...in China.
03:56Several EU sanctions packages on Russia have included Indian entities.
04:00So I think that is a potential fault line in the India-EU relationship.
04:05Now the two sides also signed a mobility pact for students and workers.
04:09What does this entail?
04:10Exactly.
04:11Exactly.
04:12And how important is it, given the crackdown we've seen on H1...
04:15...B visas in the United States?
04:18So I think the mobility issue is...
04:20...is going...
04:21...is also another one of those fault lines.
04:23I think Indians are first...
04:25First...
04:26...
04:31...
04:37multidimensional relationship.
04:38You're seeing a new security
04:40and defense partnership.
04:42And the strategic agenda
04:43being unveiled in the relationship.
04:45It builds on earlier accomplishments.
04:47Such as the Trade and Technology Council
04:48between India and the EU,
04:50which was established in 2023.
04:52India, of course, being only the second country
04:54with which the EU has a Trade and Technology Council.
04:57The other being the US
04:58and this new EU-India strategic agenda,
05:01which was endorsed.
05:02By the European Council in October.
05:04Okay, we'll see how this deal pans out in common.
05:07It's coming into us.
05:08The Indian Trade Minister hopes the deal can enter.
05:12into force within this calendar year itself, 2026.
05:15So we'll see if that does.
05:17We're going to have to leave it there, JT Bajpay.
05:19Thank you so much for joining us on the program.
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