New Delhi: India and the European Union on Monday announced the conclusion of negotiations for a comprehensive Free Trade Agreement (FTA), marking a watershed moment in bilateral economic relations and positioning the pact as one of New Delhi’s most ambitious trade deals to date.
Described by the government as a “modern, rules-based trade partnership”, the agreement covers goods, services, mobility, intellectual property and regulatory cooperation, and aims to respond to evolving global supply chain and geopolitical challenges. Together, India and the EU represent a combined market of around $24 trillion and a population of nearly 2 billion people.
Under the agreement, India will secure preferential access to the European market across 97% of tariff lines, covering about 99.5% of its export value. Over 70% of tariff lines—representing more than 90% of India’s current exports to the EU—will see immediate duty elimination, significantly benefiting labour-intensive sectors such as textiles, leather and footwear, gems and jewellery, marine products, toys and sports goods.
Bilateral merchandise trade between India and the EU stood at about $136.5 billion in 2024-25, while services trade touched $83.1 billion.
Officials said the FTA addresses the “untapped potential” in the relationship by providing long-term predictability and stable market access for Indian exporters, including MSMEs, amid rising global trade uncertainty.
India has, in turn, offered tariff liberalisation on over 92% of its tariff lines, covering nearly 97.5% of EU exports.
This includes immediate duty elimination on close to half of the tariff lines, with phased reductions over five to ten years on others. Imports of high-technology European goods are expected to diversify India’s supply base, lower input costs and improve integration into global value chains.
Agriculture and processed food exports are set to gain from preferential access for products such as tea, coffee, spices, grapes and processed foods, while sensitive sectors like dairy, cereals and poultry have been excluded to protect domestic interests.
The agreement also introduces product-specific rules of origin and allows self-certification, reducing compliance costs for exporters.
Services, a key driver of future trade growth, form a major pillar of the pact. The EU has committed market access across 144 services sub-sectors, including IT, professional services and education, while India has opened 102 sub-sectors aligned with EU priorities.
The FTA also establishes a structured mobility framework for professionals, intra-corporate transferees and independent service suppliers.
Beyond trade, the agreement strengthens cooperation on intellectual property, sanitary and technical standards, and recognises initiatives such as India’s Traditional Knowledge Digital Library.
Sector-specific gains are expected across engineering goods, chemicals, textiles, marine products, medical devices and gems and jewellery, with officials projecting stronger employment generation and deeper integration into European value chains.
The India–EU FTA is expected to come into force following legal scrubbing and ratification processes on both sides, setting the stage for a significant expansion in bilateral trade and investment flows over the coming decade.