India and European Union Conclude Free Trade Agreement
Why focus: Landmark FTA conclusion — GS2 IR/GS3 Economy. Tests BTIA timeline and tariff vs non-tariff barriers in Assertion-Reason format.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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BEFORE: Indian textile and apparel exports faced high tariff disadvantages in the EU market compared to competitors like Bangladesh and Vietnam. NOW: Tariffs on major Indian textile exports are reduced to zero, creating a level playing field.
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BEFORE: European automakers faced steep import duties of up to 100 percent in India, limiting market penetration and investment. NOW: India has agreed to a phased reduction of automobile tariffs over a 10-year period, protected by strict Rules of Origin to prevent third-party dumping.
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BEFORE: Strict EU non-tariff barriers and standard compliance issues heavily restricted Indian agricultural and pharmaceutical exports. NOW: A mutual recognition framework on sanitary and phytosanitary measures streamlines the compliance process for Indian pharma and selected farm products.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)Which of the following statements is/are correct regarding the India-EU Free Trade Agreement? 1. The negotiations for the trade pact were originally launched in 2007 as the Broad-based Trade and Investment Agreement (BTIA). 2. The 2026 agreement immediately eliminates all tariffs on European dairy products entering the Indian market.