India-EU Free Trade Agreement to Make European Food Products More Affordable
New Delhi: The landmark free trade agreement between India and the European Union is poised to significantly reduce the cost of various European food items in the Indian market. This development promises to expand consumer choices and ease price pressures over the coming years.
Major Duty Reductions on Key Products
The agreement has brought about substantial tariff cuts on numerous imported goods. Notably, duties on olive oil, margarine, and other vegetable oils have been slashed from as high as 45 percent to zero. This is particularly impactful for olive oil, where India relies almost entirely on imports, with annual consumption currently around 10,000 tonnes.
Vishal Gupta, president of the Indian Olive Association, confirmed that the industry intends to pass on the benefits of these duty reductions directly to consumers. Major market players like Borges and Figaro are expected to adjust their pricing accordingly.
Broader Impact on Food Imports
The tariff reductions extend well beyond oils. Imported processed foods from the EU will see duties drop from up to 50 percent to nil. Specific fruits like kiwi and pears, which previously faced a 33 percent tariff, will now attract only 10 percent under designated quotas.
Sudipta Bhattacharjee, partner at law firm Khaitan & Co, highlighted that for Indian consumers, aspirational European consumer products are expected to become more affordable gradually over the next five years as the agreement's provisions take full effect.
Benefits for Indian Agricultural Exports
In a reciprocal arrangement, India has secured preferential market access for its agricultural exports to the EU. This will enhance the competitiveness of several Indian products including:
- Processed foods
- Tea and coffee
- Spices
- Ghee
- Table grapes
- Gherkins and cucumbers
- Sheep and lamb meat
- Sweet corn
- Dried onion
Potential Market Expansion
The duty reductions could stimulate greater consumption of products that have previously seen limited uptake in India. Olive oil, for instance, has been used primarily for non-food purposes in the country, but more affordable pricing might encourage broader culinary adoption.
Even pet food from Europe is expected to become more competitively priced under the new agreement terms, adding another dimension to the consumer benefits.
This comprehensive trade deal represents a significant step in India-EU economic relations, with tangible benefits anticipated for both consumers and producers on both sides of the agreement.
