India and EU Strike Historic Trade and Security Deal (Full Transcript)

[00:00:00] Speaker 1: India and the European Union have agreed a landmark trade agreement after nearly two decades of on-off negotiations. The wide-ranging deal will see a number of huge tariff cuts and a joint security partnership. Calling it historic, the EU Commission President, Ursula von der Leyen, said the agreement would create a free trade zone of two billion people. India's Prime Minister, Narendra Modi, said people across the world will be discussing it as the mother of all deals.

[00:00:27] Speaker 2: This FTA will boost investment between India and the European Union. It will help forge new innovation partnerships and will strengthen supply chains at a global level, which means that this is not just a trade agreement. It is a new blueprint for shared prosperity.

[00:00:58] Speaker 3: We're not only making our economy stronger, we're also delivering security for our people in an increasingly insecure world. And today, the world's two largest economies and democracies launched their first-ever security and defence partnership. This is a landmark departure and a trust-based platform for cooperation on the strategic issues that matter most.

[00:01:30] Speaker 1: Well, my colleague, Arundhati Mukherjee, is in Delhi and joins us now. It's certainly a huge market for each of these partners in this deal. How much is it going to be worth?

[00:01:45] Speaker 4: Well, this is definitely going to be a very, very crucial achievement for both blocs, which is why you're seeing the kind of optics throughout this entire visit and the kind of statements, the phrases like mother of all deals being used by Nana Raneel Asala on the line. So they are definitely attaching a lot of importance to this, given that it is coming in this climate of global uncertainty when it comes to tariffs, the European Union having its own challenges with the US, for instance, with Greenland, India having its own challenges with the US, still not able to stitch that deal together because of its continued purchase of Russian oil. So there are some sticking points, which is why a lot of analysts have said that there was a greater degree of urgency between both sides to try and get this done, even though this conversation started in 2007. It was stalled for a number of years and then picked up again in 2022. But it's really picked up in the last few years, in the last few months, actually, to try and get this over the line. What essentially we're now seeing is greater market access for both sides, reduced tariffs for both sides as they export and import more, you know, increased market access, as I said, to some sectors which had been heavily protected. They're looking at the automobile sector, which essentially means that the European car makers might have a lot more access to Indian markets than they had before, you know, essentially, you know, in a sense, giving a new dimension to the kind of domination that we've seen by Indian brands. Of course, it's not necessary that it's going to happen immediately, but these are some of the steps that have been taken. You have to understand, statistically, both sides are very crucial to each other. The European Union has been India's largest trading bloc in that sense. So very, very important. Both of them together make up a fifth of global trade, 25% of GDP, you know, global GDP, as well as 25% of the world's population, which is why this essentially turns out to be very, very important. But having said that, you know, high on optics, yes, but some analysts when we spoke to also pointed out there are likely to be some challenges going forward as well, especially in the labour-intensive sectors that India is looking to make gains in. They will have to adhere to a higher standard as well. That means more preparation that could also translate into more costs going in. So there will be some challenges. But again, at the moment, both sides appear to be very pleased with each other, at least for now, at least in terms of the kind of statements and body language that we've seen so far.