DC | Edit India-EU FTA Sets a Template

The free trade agreement between India and the European Union, which was billed as the mother of all agreements, signals the beginning of a new era — as suggested by Prime Minister Narendra Modi — at least for the Indian economy. For this was the agreement that got bogged down for over a decade owing to insecurities and impracticalities exhibited by both the parties — India was hesitant over that threat the European car makers pose to the nascent Indian automobile sector while Europe was reluctant to compromise on its climate concerns.

Nevertheless, both India and EU shed obduracy to bring out a fairly balanced trade deal that protects their core interests. It is a “win-win” deal that safeguards the interest of Indian farmers and small businesses, while opening up a huge market for European wines, spirits, beer, olive oil, processed foods and some fruits. The India-EU deal could serve as a template for New Delhi’s trade negotiations with other countries, including the United States.

The India-EU free trade deal reaffirms global faith in the free trade regime, especially when the United States, long considered the vanguard of laissez-faire economy, shuts itself in a cocoon. It creates a free trade market consisting of two billion people — representing a fourth of global population and nearly a fourth of the world economy. The deal also has a great synergy, with Europe offering technology and India bringing to table its vast talent pool.

It may be just a matter of time that the United States, too, clinches a deal with India. But having signed free trade deals with various countries, Indian businesses must shed their jugaad mentality and focus on manufacturing products that compete with the best of the best in the world in quality. For centuries, India was known for its fine products. Now it’s time that we revive our past legacy.