The European Union (EU) and India have finalised negotiations for a free trade agreement (FTA), marking the conclusion of talks that aim to strengthen economic links between the two markets.
The agreement, which covers goods, services and investment, is expected to lead to the removal or reduction of tariffs on 96.6% of EU exports to India.
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The landmark deal is nearly over two decades in the making, and comes at a time when both parties are grappling with a more unpredictable White House and US tariffs.
Officials anticipate the deal will double exports of EU goods to India by 2032 and generate annual tariff savings of approximately €4bn ($4.74bn) for European exporters.
Current trade between the EU and India amounts to over €180bn in goods and services yearly, supporting around 800,000 jobs within the EU.
The new agreement introduces substantial tariff cuts on key products such as cars, machinery, chemicals and pharmaceuticals.
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By GlobalDataIndian tariffs on cars will gradually decrease from 110% to levels as low as 10%, with tariffs on card parts being phased out over five to ten years.
Most tariffs on machinery, chemicals and pharmaceuticals will also be reduced or eliminated.
The agreement includes provisions intended to assist small and medium-sized enterprises from both sides in navigating trade procedures.
Both parties have agreed to establish contact points specifically to provide businesses with information relevant to the FTA’s implementation and address questions about access or regulation.
The deal also provides for increased transparency and stability in trading regulations affecting smaller companies.
For agricultural products, average Indian tariffs exceeding 36% on EU agri-food exports will be either removed or significantly reduced.
Changes include reductions in tariffs on wines from 150% down to an eventual 20%, elimination of duties on olive oil within five years and removal of up to 50% tariffs on processed foods like bread and confectionery.
Certain sensitive European agricultural products, such as beef, chicken meat, rice and sugar, remain excluded from market opening under the deal.
All imports into the EU from India will continue to be subject to existing health and food safety standards.
Negotiations are ongoing for a separate Geographical Indications Agreement designed to address issues related to product origin labelling and counterfeiting affecting traditional EU goods.
The agreement opens access for European service providers in sectors including financial services and maritime transport.
India has agreed to commitments in financial services beyond those granted in previous agreements with other partners.
Intellectual property protections will also increase under shared standards that align Indian regulations more closely with international norms.
Commitments related to sustainable development form part of the deal as well, addressing environmental protection, climate change mitigation efforts, workers’ rights and cooperative dialogue platforms.
Both sides intend to sign a memorandum establishing a cooperation platform on climate action by mid-2026.
The EU has outlined plans for up to €500m in support over two years for India’s efforts to address greenhouse gas emissions and support a sustainable industrial transition.
Onward procedures involve a legal review, translation into all official EU languages and formal approval steps within both jurisdictions before the deal can take effect.
The process requires signatures from both parties, consent from the European Parliament, adoption by the EU Council and ratification by India.
EU-India FTA negotiations originally began in 2007 but were suspended in 2013 before resuming in 2022.
The 14th round concluded in October 2025 with subsequent technical discussions continuing to this announcement.
Separate negotiations regarding investment protection remain underway alongside talks concerning geographical indications.
