India, EU reach five-year MFN status in draft trade deal
India, EU reach five-year MFN status in draft trade deal
India and the European Union plan to grant each other Most Favoured Nation status for five years as part of a draft trade pact, signaling deeper economic ties and broader tariff reductions.
In a draft of the India-EU trade agreement, both sides have agreed to grant each other Most Favoured Nation status for five years, starting from the date the trade deal enters into force. The move is described as a step to stabilise the international order and deepen economic ties after years of negotiations.
The proposed deal, which relaunched negotiations in 2022, would eliminate or reduce tariffs on 96.6% of EU exports to India by value and 99.5% of Indian exports to the EU by trade value. This wide tariff liberalisation aims to boost cross-border commerce and create a more predictable market environment for businesses on both sides.
The MFN provision is part of a broader framework to simplify rules and improve access across sectors, with observers noting potential benefits for manufacturers, farmers, and services providers. While the draft outlines promising access gains, final terms, timelines, and ratification processes will determine how quickly and how deeply sections of the economy are opened.
Officials will move to formalise the agreement, with the aim of cementing a strategic economic partnership that could influence trade patterns beyond bilateral relations, including cooperation on technology and climate initiatives.
