Prime Minister Narendra Modi's participation in the G7 Summit has underscored India's growing influence in global trade dynamics, particularly with the European Union. Modi's push for a free trade agreement, set to be finalized by the end of 2026, aims to enhance economic ties and diversify supply chains at a time when global markets are increasingly volatile due to geopolitical tensions. This agreement, which could account for nearly a quarter of global GDP, promises to reduce tariffs on 99% of Indian exports to the EU and 97% of EU exports to India, potentially unlocking significant trade opportunities.
The urgency of this deal is amplified by the ongoing conflicts in Ukraine and Iran, which have disrupted traditional trade routes and supply chains. Modi's discussions with EU leaders, including Ursula von der Leyen, focused on strengthening economic engagement and security cooperation, reflecting a shared understanding of the need for resilience in the face of external pressures. The proposed framework, dubbed the International Mobilisation Partnership for Accelerating Connectivity and Trade (IMPACT), aims to harness the strengths of G7 nations and India to bolster trade and connectivity, particularly for countries in the Global South.
