It may be tempting to conclude that the long-awaited India-EU trade deal announced today will only have a small economic impact. After all, key sectors such as agriculture remain off the table and the EU’s average tariff rate on Indian goods was low anyway. But in a broader context, its looks more significant. This is India’s fourth bilateral trade deal in quick succession as policymakers aim to diversify the export base beyond the US. And increased competition for local firms, alongside the broader embrace of domestic reforms, will lay the groundwork for faster medium-term growth.
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