EU-India Free Trade Agreement Poised to Transform Economic Landscape
Austria's State Secretary in the Federal Chancellery, Alexander Proll, has declared the forthcoming EU-India Free Trade Agreement (FTA) a monumental advancement in international economic cooperation. Proll emphasized that this pact is expected to unlock substantial opportunities across multiple sectors, including trade, artificial intelligence, and the development of resilient supply chains.
A "Mother of All Deals" for Nearly 200 Crore People
In an exclusive interview, Proll described the FTA as a transformative arrangement that could benefit approximately 200 crore individuals by establishing one of the planet's largest free trade zones. He highlighted that Prime Minister Narendra Modi's 2024 visit to Austria, commemorating 75 years of diplomatic relations, set the stage for this significant agreement.
"It is the mother of all deals. I think it is a win-win situation for the whole European Union and India," Proll stated, underscoring the mutual advantages anticipated from this partnership.
Substantial Tariff Reductions on Horizon
Negotiations for the FTA were relaunched in 2022 following years of discussions. The finalized deal is projected to eliminate or substantially reduce tariffs on an impressive 96.6% of EU exports to India by value and 99.5% of Indian exports to the EU by trade value. This sweeping tariff liberalization is a cornerstone of the agreement's potential to stimulate bilateral trade flows.
Artificial Intelligence as a Central Pillar of Collaboration
Proll identified artificial intelligence (AI) as a critical domain for future EU-India collaboration, characterizing it as "the next step after digitalisation." He articulated a vision for a human-centred approach to AI, aimed at safeguarding democratic values and fostering innovation.
"Our principle is that AI should serve for people ... a human-centred AI. We build human-centred AI around people to save democracy and make innovation happen. I think that is the way we can learn from each other," Proll elaborated, pointing to shared learning and development in this cutting-edge field.
Focus on Balanced Interdependence in Supply Chains
Addressing global supply chain dynamics, Proll advocated for closer economic integration that prioritizes balanced interdependence over isolationism. He argued that the FTA is instrumental in fostering these reciprocal dependencies.
"It is not about being isolated, it is about creating dependencies on both sides. So it is all about getting closer to each other and the FTA is one part of putting the countries more together," he explained, emphasizing the agreement's role in strengthening bilateral ties.
Final Steps Before Implementation
The agreement is currently in its concluding phases, awaiting final legal vetting and ratification by EU institutions. This process includes securing consent from the European Parliament and completing India's domestic procedural requirements. Implementation is anticipated within the coming months to a year, marking the start of this new chapter in EU-India relations.
The EU-India FTA represents a strategic alignment poised to reshape trade patterns, drive technological innovation, and enhance supply chain resilience, setting a new benchmark for international economic partnerships.
