PM Modi Advocates ‘Double Engine’ Strategy Amidst Global Turmoil Following India-EU Historic FTA
Prime Minister Narendra Modi has emphasized the importance of a “double engine” growth strategy as India and the European Union (EU) finalized a landmark free trade agreement (FTA) on Tuesday. Speaking at the India-EU Business Forum, Modi highlighted the need for stability amid global turmoil, asserting that the new partnership will significantly reshape the global economy. He described the FTA as the “biggest free trade agreement” in India’s history, aimed at fostering common prosperity and enhancing economic ties between the two regions.
Significance of the India-EU Free Trade Agreement
The newly signed FTA is being hailed as a transformative step in India-EU relations, with Modi calling it a “blueprint for common prosperity.” He noted that both India and the EU share fundamental values as market economies, which strengthens their partnership. Over the past decade, trade between India and the EU has doubled, reaching a substantial 180 billion Euros. Modi pointed out that more than 6,000 European companies are currently operating in India, while Indian businesses have established a presence in the EU, with around 1,500 companies active in the region. This agreement is expected to further enhance these economic interactions, creating new opportunities for both sides.
Investment and Economic Engagement
Prime Minister Modi provided insights into the scale of economic engagement between India and the EU, revealing that Indian investments in the EU have approached 40 billion Euros. He emphasized the deepening cooperation across various sectors, including research and development, manufacturing, and services. Modi urged business leaders to leverage this partnership, stating that it is time to evolve the relationship into a comprehensive, whole-of-society collaboration. The finalized FTA is seen as a significant step towards achieving this vision, unlocking fresh avenues for cooperation and mutual benefit.
Sector-Specific Benefits of the FTA
The FTA is expected to provide substantial benefits across multiple sectors, particularly for India’s labor-intensive industries. Modi outlined that sectors such as textiles, gems and jewelry, auto parts, and engineering goods will gain easier access to the EU market. Additionally, Indian farmers and fishermen are set to benefit from new opportunities for fruits, vegetables, processed foods, and marine products. The service sector, including information technology, education, traditional medicine, and business services, is also poised to experience growth as a result of the agreement. This comprehensive approach aims to bolster India’s economic resilience amid ongoing global uncertainties.
Context of Global Economic Challenges
The finalization of the India-EU FTA comes at a time of heightened global tensions and trade disruptions, largely influenced by previous tariff policies. This long-awaited agreement is anticipated to deepen bilateral engagement and foster cooperation across a wide range of sectors. By establishing a robust framework for trade and investment, the India-EU partnership aims to navigate the complexities of the current global economic landscape, positioning both regions for future growth and stability.
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