India’s trade deal with the European Union gives businesses in the South Asian nation a reprieve from punishing US tariffs, keeping alive Prime Minister Narendra Modi’s ambition to make the country a global manufacturing hub.
Dubbed the “mother of all deals” by both sides, the free trade pact will open the EU market more widely to Indian exporters, especially in labor intensive industries like clothing and furniture.
The bloc will eliminate or reduce tariffs on 99.5% of imports from India, including phasing out duties on apparel and leather, sectors battered by US President Donald Trump’s 50% tariffs.
Farida Group, one of India’s largest shoemakers, expects sales in Europe to rise 10% to 20% once the agreement is implemented, helping reduce its exposure to the US, previously its biggest market.
“The deal is a huge relief and is definitely going to help labor intensive sectors,” said Israar Ahmed, managing director, Farida Shoes Pvt Ltd. “With both the UK and EU deal, we get a big consolidated market and now we aim to increase our exports to this region to 50% to 60%.”
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