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Hailed as historic, the India–EU trade deal is one of the largest agreements ever signed. Its real significance, however, lies not just in its size, but also in how carefully it has been designed for a world marked by geopolitical tension, protectionism, and uncertainty.
When the India–EU trade deal was announced, the superlatives came thick and fast. “Historic.” “Transformational.” The “mother of all deals.” Leaders lined up to celebrate its scale, while analysts rushed to quantify what two billion consumers and trillions of dollars might mean for global trade. It was a moment dominated by numbers and headlines.
What caught my eye, while working through the official factsheets and political statements, was a quieter phrase used by Marta Bengoa of ORF America: economic insurance. It felt more honest than the headline language. Less about the revival of free trade, more about managing risk. Less about optimism, more about navigating a world where trade is no longer predictable or insulated from politics.
That framing matters, particularly when viewed from New Zealand, where trade policy is rarely about spectacle and almost always about reading signals correctly.
A deal built on ambition, designed with restraint
There is no disputing the scale of the agreement. The India–EU Free Trade Agreement links the world’s second- and fourth-largest economies, creating a trade zone of nearly two billion people. European Commission President Ursula von der Leyen leaned into that symbolism when the deal was announced.
“The EU and India make history today, deepening the partnership between the world’s biggest democracies. We have created a free trade zone of 2 billion people, with both sides set to gain economically. We have sent a signal to the world that rules-based cooperation still delivers great outcomes.”
The emphasis on rules-based cooperation is revealing. It reflects Europe’s growing unease about the erosion of predictable trade norms at a time when tariffs, sanctions, and industrial policy have returned to the centre of economic statecraft.
India’s negotiating posture mirrors that caution. The agreement grants Indian exporters preferential access across almost all EU tariff lines by value, with immediate duty elimination for labour-intensive sectors such as textiles, leather, footwear, gems and jewellery, and marine products. These are politically significant sectors at home, closely tied to employment generation and MSME growth.
At the same time, India has been explicit about what remains off the table. Dairy, cereals, poultry, and other sensitive agricultural products are safeguarded, and policy space is preserved where domestic politics demand it. This is not India applying protectionism with precision.
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