India's trade deal with EU to boost investment, manufacturing: Moody's Ratings
Moody's Ratings has said that the India-EU free trade pact will be credit positive for India, as lower tariffs and better market access are expected to attract foreign investment, boost manufacturing, and increase the export competitiveness of labor-intensive sector. India and the European Union recently declared the completion of negotiations for the Free Trade Agreement (FTA), described as the ‘mother of all deals.'
Under the agreement, 93 percent of Indian shipments will gain duty-free access to the 27-nation bloc, while imports of luxury cars and wines from the EU will become more affordable. The deal, concluded after negotiations spanning about two decades, will create a market of about 2 billion people across the world's fourth-largest economy, India, and the second-largest economic bloc, the EU.
According to Moody's Ratings, India's successful completion of trade talks with the EU reflects its ongoing commitment to selectively expanding its trade partnerships. Besides, it stated reduced tariffs on EU imports could help lower costs, although such imports remain a smaller share of India's overall import bill.
