New Delhi [India], January 28 (ANI): The India-EU Free Trade Agreement concluded on Tuesday after long negotiations and is expected to significantly enhance bilateral trade and investment ties, strengthen supply chains, and deepen economic cooperation between India and the European Union.

Ministry of External Affairs sources said that the actual formalisation of the deal is likely to happen within a year. Normally, this process could take up to two years but there has been a strong political will shown by the two sides, and this has resulted in an urgency in the process which is now expected to conclude in a year.

Sources described the deal as a 'living agreement'. The European Union comprises 27 countries and there could be challenges in terms of some regulations and certain parts of the agreement can meet the challenges locally. To overcome any such issue, the agreement has been kept 'as living'. This is more so when it comes to the sensitive subjects like Carbon Emissions and Agriculture.

The agreement, sources said, will be revisited every five years and can be looked at whenever there are challenges.

Sources further said that despite being in negotiations for many years the deal got a push due to the political willingness shown by both sides. Both sides wanted to conclude the deal to create jobs and increase industrial output. India's deal with the UK also gave further impetus to pushing the EU FTA.

Sources also said that despite countries within the EU having certain issues with Russia, this has no impact on the deal.

The sources also clarified that the pushing of the deal was not a knee-jerk reaction to recent geo-political events. The deal fructified mainly due to political willingness showed by both sides.

The FTA comes after intense negotiations since the re-launch of negotiations in 2022. On Tuesday the deal was finalized during the India-EU summit between PM Narendra Modi and European Union Presidents Ursula von der Leyen and Antonio Costa.

According to the joint statement between the India and EU, this historic deal is a milestone in the India-EU Strategic Partnership that will significantly enhance bilateral trade and investment ties, drive shared prosperity, strengthen resilient and diversified supply chains, and support sustainable and inclusive growth.

The European Union is one of India's largest trading partners, with bilateral trade in goods and services growing steadily over the years. In 2024-25, India's bilateral trade in goods with the EU stood at Rs 11.5 Lakh Crore (USD 136.54 billion) with exports worth Rs 6.4 Lakh Crore (USD 75.85 billion) and imports amounting to Rs 5.1 Lakh Crore (USD 60.68 billion). India-EU trade in services reached Rs 7.2 Lakh Crore (USD 83.10 billion) in 2024.

The FTA delivers unprecedented market access for more than 99% of India's export by trade value, while preserving policy space for sensitive sectors and reinforcing India's developmental priorities.

India has gained preferential access to the European markets across 97% of tariff lines, covering 99.5% of trade value, in particular: 70.4% tariff lines covering 90.7% of India's exports will have immediate duty elimination for important labour-intensive sectors such as textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery and certain marine products, amongst others.

20.3% tariff lines covering 2.9% of India's exports will have zero duty access over 3 and 5 years for certain marine products, processed food items, arms and ammunition, amongst others. 6.1% tariff lines covering 6% of India's exports will have preferential access by way of tariff reduction for certain poultry products, preserved vegetables, bakery products amongst others or through TRQs for cars, steel, certain shrimps/ prawns products, amongst others.

Under the FTA, broader and deeper commitments have been secured from the EU across 144 services subsectors, including IT/ITeS, professional services, education, and other business services. This covers a vast range of services sectors spectrum in which Indian service providers will get a stable and conducive regime in the EU market to supply their services. India's competitive, high-tech services are expected to drive India's exports while benefitting EU businesses and consumers. (ANI)