Unpacking the "mother of all deals"
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What is the significance of the trade deal between India and the EU?
Today, the trade agreement being called the mother of all deals. Live from the UK, this is the Marketplace Morning Report from the BBC World Service. I'm Stuart Clarkson. Good morning. India and the European Union have agreed a major trade deal after nearly two decades of on-off negotiations. The wide-ranging agreement will see a number of huge tariff cuts and a joint security partnership. At a news conference in Delhi, India's Prime Minister Narendra Modi said it signalled a deepening of friendship between them. The EU Commission President Ursula von der Leyen said the agreement would create a free trade zone of two billion people. Let's bring in the BBC's Arundhye Mukherjee, who's in Delhi. Hi there.
Hi Stuart, how's it going? Not too bad. So tell us about this deal. It sounds like it's quite a big deal.
Well, in their own words, they're referring to it as the mother of all deals.
How does this trade agreement impact global trade dynamics?
I think the fact that both of these sides have managed to get this deal across the line is in itself important, given the relationship that both of them have shared. The European Union has been the largest trading bloc for India. Trade between both countries had crossed $135 billion last year. Both together are 25% of the global population, a fifth of global trade. So you can just imagine that kind of statistic gives you a sense of why this relationship is important. which is why there was a lot of significance being attributed to these conversations that were happening, which began, in fact, in 2007, stalled for several years, picked up again in 2022. And I think there was a great deal of urgency, given the geopolitical scenario, the global uncertainty over tariffs, that both sides felt that they needed to work together and get this over the line.
Some of the sectors that we're looking at, the labour-intensive sectors for India, would be looking for concessions in terms of tariffs, for instance, jewellery, textiles, leather, gems. And in terms of the European Union, they would certainly be looking for more market access for some of the very heavily protected Indian sectors. One of them that's been talked about is the automobile sector, where European carmakers are hoping to increase their footprint.
And Ursula von der Leyen saying it's a free trade zone, 2 billion people, both sides set to benefit. I suppose there's got to be some losers here as well. And the U.S. deal with India still ongoing in terms of talks. The U.S.
What sectors are expected to benefit from the India-EU trade deal?
relationship with Europe a little bit fractious after the Greenland situation last week. So how do you think the U.S. might react to this deal?
Well, you know, it remains to be seen. It's always been unpredictable in terms of trade and tariffs as President Trump took over and some of his announcements that have come in off late for the European Union. The whole Greenland conversation has been a bit of a concern for India. It's continuing to buy Russian oil, has not gone down well with Donald Trump, which is why you're seeing India being slapped with some of the highest tariffs around the world. India was very conscious of that fact. And the fact that they have not been able to get a deal done with the U.S. has been a bit of a stress point for sure for officials here, which is why they're looking to see whether they can recalibrate trade relationships with other partners.
trying to see where else they can get their markets open, where else can these businesses sort of flourish. But having said this, there are going to be challenges. One, of course, what does the US do? And two, I was just speaking to an economist a short while back who said that, for instance, the textile industry, you know, when they're making something and selling it to Europe, they'll have to adhere to different kind of standards. And I think that means a lot more preparation, a lot more cost going into it.
What challenges might arise from the implementation of this trade deal?
And I think those will be the finer points that I think will come out as challenges perhaps going forward. At the moment the focus of course will be on the achievables, the tangibles, but of course this is just the announcement of the conclusion of talks.
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Chapters
6 chapters
1
What is the significance of the trade deal between India and the EU?
0:00–0:50
2
How does this trade agreement impact global trade dynamics?
0:50–2:21
3
What sectors are expected to benefit from the India-EU trade deal?
2:21–3:34
4
What challenges might arise from the implementation of this trade deal?
3:34–4:51
5
How does the U.S. respond to the India-EU trade agreement?
4:51–6:22
6
What recent developments have occurred regarding U.S. tariffs on South Korea?
6:22–7:08