A study from the Kiel Institute for World Economy, reported by the German financial newspaper “Handelsblatt” in its Wednesday edition, suggests that a trade agreement between the EU and India could bring substantial welfare gains. The research indicates that both the EU’s and India’s gross domestic product would grow an annual average of 0.12 % to 0.13 % higher than in the absence of the deal. For the EU this translates into roughly €22 billion of additional economic output, while India would see about $4.2 billion more in production.
Under the free‑trade pact alone, Indian exports to the EU are projected to rise by 41 %, and EU exports to India by 65 %. Within the EU, the chemicals sector stands to benefit the most, with exports expected to increase by 205 %. Machinery, electronics and plastics would see growth rates of 56 %, 153 % and 169 % respectively.
EU Commission President Ursula von der Leyen is currently in India and aims to finalize the negotiations on the free‑trade agreement during her visit this week.
