A look at India-EU free trade agreement

The deal will strengthen economic and political ties between the world’s two largest democracies at a time of rising geopolitical tensions and global economic challenges.

On 17 June 2022, the European Union relaunched negotiations with India for a Free Trade Agreement, and launched separate negotiations for an Investment Protection Agreement and an Agreement on Geographical Indications (GIs). Negotiations for a Free Trade Agreement were concluded on 27 January 2026.
The EU is India’s largest trading partner, accounting for 120 billion euros worth of trade in goods in 2024 or 11.5 per cent of total Indian trade.

India is the EU’s 9^th largest trading partner, accounting for 2.4 per cent of the EU’s total trade in goods in 2024. Trade in services between the EU and India reached 59.7 billion euros in 2023, up from 30.4 billion euros in 2020.

The Free Trade Agreement:

• Grants privileged access for EU exports to the world’s most populous country of 1.45 billion people
• Will potentially double EU goods exports to India by 2032
• Eliminates or reduces tariffs on over 96 per cent of EU goods exports
• Eliminated or reduce prohibitive tariffs on key EU agri-food products like wine, olive oil, chocolate and pastries
• Will save around 4 billion euros every year in duties on European products
• The agreement removes often prohibitive Indian tariffs while fully respecting sensitive agricultural sectors on both sides.
• Indian tariffs on agrifood products are 36 per cent on average and can be as high as 150 per cent. The agreement substantially reduces or eliminates them on EU exports of key agricultural goods.

India will grant the EU tariff reductions that none of its other trading partners have received, dramatically improving market access for EU exports. For example, tariffs on cars will gradually go down from 110 per cent to 10 per cent with a quota of 250,000 vehicles a year. High tariffs of up to 44 per cent on machinery, 22 per cent on chemicals and 11 per cent on pharmaceuticals will be mostly eliminated.

What needs to happen for the deal to start working?

Here are the steps the EU still needs to take:

1. Publish negotiated draft texts
2. Legal revision and translation into all official EU languages
3. Propose the agreement to the Council for the signature and conclusion
4. Adoption by the Council
5. Signing of the agreement between the EU and India
6. European Parliament’s agreement to the deal
7. The Council’s decision on concluding the deal (essentially allowing it to enter into force)

Once India also ratifies the Agreement, it can enter into force.

For more details: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements/factsheet-eu-india-free-trade-agreement-main-benefits_en

https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements/factsheet-eu-india-free-trade-agreement-eu-agri-food-exports_en

https://ec.europa.eu/commission/presscorner/detail/en/qanda_26_185

https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements_en