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Trade agreement being called the mother of all deals. Live from the UK this is the Marketplace Morning report from the BBC World Service. I'm Stuart Clarkson. Good morning. India and the European Union have agreed a major trade deal after nearly two decades of on off negotiations. The wide ranging agreement will see a number of huge tariff cuts and a joint security partnership. At a news conference in Delhi, India's Prime Minister Narendra Modi said it signaled a deepening of friendship between them. The EU Commission President Ursula von der Leyen said the agreement would create a free trade zone of 2 billion people. Let's bring in the BBC's Arundhai Mukherjee who's in Delhi. Hi there.
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Hi Stuart. How's it going?
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Not too bad. So tell us about this deal. It sounds like it's quite a big deal.
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Well, in their own words they're referring to it as the mother of all deals. I think the fact that both of these sides have managed to get this deal across the line is in itself important given the relationship that both of them have shared. The European Union has been the largest trading bloc for India. Trade between both countries had crossed $135 billion last year. Both together are 25% of the global population, a fifth of global trade. So just you could just imagine that kind of statistic gives you a sense of why this relationship is important. So which is why there was a lot of significance being attributed to these conversations that were happening which began in fact in 2006. Seven stalled for several years picked up again in 2022. And I think there was a great deal of urgency, given the geopolitical scenario, the global uncertainty over tariffs, that both sides felt that they needed to work together and get this over the line. Some of the sectors that we're looking at, the labour intensive sectors for India would be looking for concessions in terms of tariffs. For instance, jewelry, textiles, leather, gems. And in terms of the European Union, they would certainly be looking at for more market access for some of the very heavily protected Indian sectors. One of them that's been talked about is the automobile sector, where European carmakers are hoping to increase their footprint.
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And Ursula von der Leyen saying, you know, it's a free trade zone, 2 billion people, both sides set to benefit. I suppose there's got to be some losers here as well. And the US Deal with India still ongoing in terms of talks. The US Relationship with Europe a little bit fractious after the Greenland situation last week. So how do you think the US Might react to this deal?
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Well, you know, it remains to be seen. It's always been unpredictable in terms of trade and tariffs. As President Trump took over and some of his announcements that have come in off late for the European Union, the whole Greenland conversation has been a bit of a concern for India. It's continuing to buy Russian oil has not gone down well with Donald Trump, which is why you're seeing India being slapped with some of the highest tariffs around the world. India was very conscious of that fact, and the fact that they have not been able to get a deal done with the US has been a bit of a stress point for sure for officials here, which is why they're looking to see whether they can recalibrate trade relationships with other partners, trying to see where else they can get their markets open. Where else can these businesses sort of flourish. But having said this, there are going to be challenges. One, of course, what does the US Do? And two, I was just speaking to an economist a short while back who said that, for instance, the textile industry, you know, when they're making something and selling it to Europe, they'll have to adhere to different kind of standards. And I think that means a lot more preparation, a lot more cost going into it. And I think those will be the finer points that I think will come out as challenges perhaps going forward. At the moment, the focus, of course, will be on the achievables, the tangibles. But of course, this is just the announcement of the conclusion of talks. The ratification and signing will still take a few more months after due process in terms of legal scrutiny. That is usually the case in these kind of deals.
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Okay. Arundhai Mukherjee, thanks for being with us here on Marketplace.
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Thanks for having me.
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Let's do the numbers now. And India's Nifty50 index rose half a percent on the back of the announcement of that trade deal with the eu. Meanwhile, sales of fully electric cars overtook petrol ones for the first time in the European Union last month. And the number of new EVs on the road was up 13.6% 6% in 2025. The Chinese automaker BYD took market share off Tesla by more than tripling its sales in the EU, with Tesla sales there down 38% year on year. And the US chip firm Micron has announced plans to build a $24 billion plant in Singapore to help meet growing demand for AI powered tech. Now, French lawmakers have passed a bill that would ban under 15s from accessing social media, following in the footsteps of Australia's ban for teens under 16 years old. It was adopted by France' assembly but still needs to pass in the Senate before becoming law. President Emmanuel Macron called the result a major step towards protecting French children. Authorities are hoping it'll be fast tracked so the ban can be in place for the start of the new school year in September. And a few days after the US dropped the threat to impose 10% tariffs on eight NATO member countries over Greenland, President Trump has announced he's hiking tariffs on South Korea despite an agreement made last year. The BBC's Asia business correspondent Sarajana Tiwari is following this in Singapore.
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This is quite the about turn, President Donald Trump saying in a post on Truth Social that he was increasing tariffs on South Korean imports into the US related to autos, lumber and pharmaceuticals to 25% from the agreed 15%. He said South Korean lawmakers have been slow to approve the trade deal between the two countries, even though the US has lowered its tariffs. Now, it's not immediately clear when that tariff hike or whether if it could take effect or what specifically triggered this move, but the market certainly didn't like it. Shares in Hyundai dropping by almost 5%. Kia Motors down by 6%, although they have largely recovered. But they may have recovered because South Korea's ruling party did come back fairly quickly with a response, saying it will work with the opposition to speed up the path of five bills now pending in Parliament that would allow the enactment of investment in the United States.
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Suranjana Tiwari reporting. Our producer today was Neil Morrow. Our editor is Naomi Rainey in the UK I'm Stuart Clarkson with the Marketplace Morning Report from the BBC World Service.
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