India-EU FTA To Provide 5-Year Most Favoured Nation Status

(MENAFN- KNN India) New Delhi, Feb 28 (KNN) India and the European Union are set to grant each other Most Favoured Nation (MFN) status under their proposed free trade agreement (FTA).

The provision, included in the draft text released on Friday, will bind both sides to World Trade Organisation (WTO) rules and prevent new import or export restrictions beyond global norms for 5 years, according to a Reuters report.

The agreement, concluded after nearly 18 years of negotiations, is expected to come into force within a year after legal review and ratification by the European Parliament and Indian authorities.

Tariff Cuts and Market Access

The pact will progressively eliminate or reduce tariffs on 96.6 per cent of traded goods by value. India will remove duties on 96 per cent of goods over a period of up to 10 years, while the EU will open 99.5 per cent of its market, with most tariffs reduced to zero immediately or within seven years.

Sensitive sectors such as dairy, rice, sugar and beef have been excluded.

Brussels estimates the deal could double EU exports to India by 2032 and save European firms about EUR 4 billion annually in duties.

Broader Commitments

Beyond tariffs, the draft locks in WTO-aligned food safety and plant health standards, streamlined customs procedures and binding appeal mechanisms. It also expands cooperation in digital trade, while allowing both sides to retain authority over personal data protection.

Indian exporters in textiles, leather, gems and seafood are expected to gain immediate zero-duty access to the EU market, while European carmakers and alcohol producers will benefit from significant tariff cuts in India. The agreement also covers services, intellectual property, labour and sustainable development provisions.

(KNN Bureau)

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