Breaking Update: Here’s a clear explanation of the latest developments related to Breaking News:India, European Union agree on Most Favoured Nation status for 5 years, shows draft trade deal| India News– What Just Happened and why it matters right now.
India and the European Union have agreed to grant each other ‘Most Favoured Nation’ status for five years from the date their trade agreement comes into force, according to a draft of the deal released on Friday.
On January 27, the two sides announced that talks on the free trade agreement had concluded. The pact, described as the ‘mother of all deals’, will allow 93 per cent of Indian exports to enter the 27-nation bloc duty-free. Imports of luxury cars and wines from the European Union are also set to become cheaper.
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Inside India-EU trade deal, as per draft agreement
According to the draft agreement released on Friday by the Union commerce ministry, India and the European Union plan to grant each other Most Favoured Nation status once the agreement takes effect.
This means neither side can give more favourable tariff terms to other trading partners for five years.
The agreement also contains an annexure that provides for mediation, allowing disputes to be resolved through a fast-track process with the help of a mutually agreed mediator.
Both sides have agreed not to introduce new import or export curbs beyond what is allowed under World Trade Organization rules. They have also decided to step up cooperation in digital trade under the proposed free trade agreement, as per the draft.
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To make trade smoother, New Delhi and Brussels will bring food safety and plant health rules in line with World Trade Organization standards. Certification and audit procedures will also be simplified.
The text sets out plans for closer customs cooperation and quicker clearance of goods. These commitments will become binding after ratification.
The two sides will start sharing annual import data one year after the deal takes effect. This is meant to track how the agreement is being carried out and how tariff benefits are being used.
They have also agreed to provide fair and accessible appeal processes for customs decisions related to imports, exports or goods in transit.
On digital trade, India and the European Union have committed to reducing unjustified barriers and supporting an open and secure online space.
Notably, the European Union is India’s largest trading partner. Bilateral goods trade stood at USD 135 billion in FY 2023-24.
With inputs from agencies