EU inks 'mother of all deals' with India trade agreement amid global turmoil

After months of intense negotiations, the European Commission concluded on Tuesday a free-trade deal with India which sharply reduces tariffs on EU products from cars to wine as the world looks for alternative markets following President Donald Trump's tariffs.

The announcement was made during a high-level visit by European Union leaders including Commission President Ursula von der Leyen. Both countries hailed a "new chapter in strategic relations" as both sides seek alternatives to the US market.

India is currently facing tariffs of 50% from the Trump administration, which has severely dented its exports. After sealing the Mercosur deal with Latin American countries earlier this month, the EU has said it aims to speed up its trade agenda with new partners.

Talks went down to the wire with negotiators meeting over the weekend and in the early hours of Monday. The deal says it will bolster the "untapped" potential of their combined markets but did not include politically sensitive sectors such as agriculture.

Under the agreement, the EU aims to double goods exports to India by 2032 by cutting tariffs on approximately 96% of EU exports to the country, saving around €4 billion a year in duties. At its full potential, the deal creates a market of 2 billion people.

Europe’s carmakers emerge as clear winners, with Indian customs duties gradually reduced from 110% to 10% if the terms are applied. Tariffs in sectors including machinery, chemicals and pharmaceuticals will also be almost entirely eliminated.

Wine and spirits - key exports for countries like France, Italy and Spain - will see duties reduced from 150% to around 20 to 30%. Olive oil duties will be cut to zero from 40%.