Economy News

EU and India seal the 'mother of all deals': car tariffs to fall from 110% to 10%

India and the European Union concluded a free trade agreement in New Delhi on Tuesday 27 January after nearly 20 years of talks. India will reduce or eliminate tariffs on 96.6% of EU exports, and the EU will phase in cuts covering nearly 99% of India's shipments by value, the Associated Press reports via Fortune. Bilateral trade was $136.5bn in 2024–25; both sides aim for about $200bn by 2030.

Indian tariffs on EU cars will fall from 110% to as low as 10%, and premium wine from 150% to 20%. Business Today says the lower car rate applies to a quota of 250,000 vehicles a year and EU beer duties fall to 50%. The EU expects to save exporters up to €4bn a year.

“People around the world are calling this the mother of all deals.” — Narendra Modi, via Dawn

How each outlet framed it

• Fortune (AP) — the geopolitics: a 50% US tariff on Indian goods and Trump's Greenland threats gave the talks new momentum. India kept dairy and cereals out.
• Dawn (Reuters) — the process: Indian zero tariffs for textiles, leather and gems in Europe, and an official saying legal vetting will take five to six months.
• Business Today — the Indian consumer view: cheaper machinery, medical equipment, olive oil and beer.

What we don't know yet: when the deal takes effect. The Indian official quoted by Dawn expects implementation within a year, after formal signing.