New Delhi, Jan 27 (NationPress) The India-EU trade agreement aims to enhance bilateral trade and strengthen economic relations, ultimately fostering job creation and supporting the growth of MSMEs in the technology sector. The IT industry's leading body, Nasscom, stated on Tuesday that this deal is expected to significantly bolster investor confidence in India's services sector.

The FTA incorporates specific chapters dedicated to SMEs, complete with contact points and digital platforms. In light of current geopolitical challenges, this agreement diversifies market opportunities for Indian IT exporters, providing a buffer against global trade uncertainties, according to Nasscom.

“This agreement solidifies India's role within global value chains for digital services. We are looking forward to reviewing the detailed draft to fully comprehend the implementation of the FTA provisions,” it noted.

While substantial tariff reductions are anticipated for goods, the advantages for services are primarily focused on enhancing market accessibility and establishing predictable, rules-based frameworks.

As the services sector is a major and rapidly growing component of both economies, the benefits are expected to manifest as improved access to the EU market for Indian technology firms. This could reduce non-tariff barriers and facilitate cross-border service delivery, according to Nasscom.

“The digital trade regulations are designed to bolster business while safeguarding privacy, security, and public policy. Indian IT firms are poised to seize greater opportunities in Europe, including simplified cross-border service provision (Mode 1 under GATS) and potentially enhanced mobility for professionals (though Mode 4),” it elaborated.

Moreover, India and the EU have agreed to a constructive framework that will facilitate Social Security Agreements within five years with all EU member states.

This collaboration is set to deepen the ties between the EU and India in areas of technology, innovation, and digital advancements, building upon the India-EU Trade and Technology Council.

Such an agreement could catalyze increased EU investment in India's IT ecosystem, joint ventures, and research and development in sectors such as AI, semiconductors, clean technology, and startups. Indian IT enterprises are expected to benefit from technology transfer, co-creation initiatives, and broadened partnerships, remarked Nasscom.

The trade accord offers unprecedented market access for Indian exporters in both goods and services, particularly benefiting labor-intensive sectors, MSMEs, women entrepreneurs, artisans, and the youth—core areas of focus for the Government's agenda of inclusive growth.