New Delhi: India and the European Union have concluded negotiations on a landmark Free Trade Agreement (FTA), setting the stage for a major expansion in bilateral trade, investment, and services engagement between two of the world’s largest economies.
The agreement, described as one of India’s most comprehensive trade deals to date, provides preferential market access for over 99% of India’s exports by value and covers nearly 92% of tariff lines for EU exports to India. With a combined market size of nearly USD 24 trillion, the pact is expected to significantly strengthen supply chains, boost exports, and deepen economic integration Factsheet-on-India-EU-trade-dea….
Trade Boost Across Goods and Services
India–EU merchandise trade stood at USD 136.5 billion in 2024–25, while services trade touched USD 83.1 billion. The FTA aims to accelerate this growth by eliminating tariffs on a majority of traded goods and improving regulatory predictability for businesses on both sides.
Key labour-intensive sectors such as textiles, leather, footwear, marine products, gems and jewellery, toys, and chemicals will benefit from immediate or phased duty elimination. Over 70% of India’s export lines will receive zero-duty access from the date of implementation, enhancing competitiveness in the European market.
Strong Gains for MSMEs and Manufacturing
The agreement places strong emphasis on MSMEs by simplifying rules of origin, enabling self-certification, and easing compliance requirements. Indian manufacturers are expected to gain improved access to European value chains, particularly in engineering goods, chemicals, medical devices, plastics, and rubber products.
Sectors such as textiles and apparel, which face tariffs of up to 12% in the EU, will now benefit from zero-duty access, potentially boosting exports and employment generation across key manufacturing clusters.
Agriculture and Rural Economy to Benefit
The FTA provides preferential access for Indian agricultural and processed food products including tea, coffee, spices, grapes, gherkins, marine products, and processed foods. At the same time, sensitive sectors such as dairy, cereals, poultry, and certain fruits and vegetables remain protected through calibrated safeguards.
Officials said the agreement is expected to strengthen farmer incomes, improve export realisations, and enhance India’s positioning in high-value European food markets Factsheet-on-India-EU-trade-dea….
Services, Mobility and Talent Flow
Services form a key pillar of the agreement, with the EU committing market access across 144 service sub-sectors, including IT, professional services, education, and business services.
The pact also introduces a structured framework for the temporary movement of professionals, including intra-corporate transferees, contractual service suppliers, and independent professionals — providing a boost to India’s services exports and global talent mobility.
Strategic and Long-Term Impact
The agreement strengthens cooperation on intellectual property rights, digital trade, technical standards, and sanitary measures, while ensuring alignment with global trade norms. It also includes provisions to facilitate innovation, technology transfer, and sustainable trade practices.
With wide-ranging sectoral coverage and long-term market certainty, the India–EU FTA is expected to play a pivotal role in supporting India’s export growth, job creation, and global trade ambitions as it moves toward its 2047 development goals.
