India–EU Free Trade Agreement (FTA)

Introduction

The India–EU FTA is a landmark trade agreement aimed at deepening economic integration between India and the European Union through wider market access, lower tariffs, services liberalisation and predictable trade rules.

Background

1. Negotiations were relaunched in 2022 after being stalled for several years, with the objective of addressing long-standing market-access concerns.
2. Negotiations were concluded on 27 January 2026 at the 16th India–EU Summit in New Delhi.
3. As of September 2026, the agreement is not yet legally in force; signature and completion of the respective internal procedures are required.

Key Features

1. Tariff Liberalisation
   • India has secured preferential access across 96.8% of tariff lines covering 99.5% of its exports.
   • Around 90.7% of India’s exports by trade value are to become duty-free upon entry into force.
2. Boost to Labour-Intensive Exports
   • Sectors such as textiles, apparel, leather, footwear, gems and jewellery are expected to gain from improved access to the European market.
   • This can support employment generation and export diversification.
3. Agricultural Market Access
   • India obtains preferential access for several products including tea, coffee, spices, grapes and processed food products.
   • At the same time, sensitive sectors such as dairy, cereals and poultry have been protected through exclusions.
4. Services and Mobility
   • The agreement provides market access in 144 services subsectors, including IT/ITeS, professional and business services.
   • It also establishes a framework facilitating temporary movement of professionals and business persons.
5. Investment and Technology
   • Greater predictability in trade and investment can encourage European FDI, technology transfer and integration into global value chains.
   • The EU already has a substantial investment presence in India, with around 6,000 European companies operating in the country.

Significance for India

1. Export competitiveness: Lower tariffs can improve India’s competitiveness in the large European consumer market.
2. Employment: Labour-intensive sectors can benefit through expanded export opportunities.
3. Global Value Chains: Greater integration with European firms can strengthen India’s participation in sophisticated global production networks.
4. Services exports: Improved access can benefit India’s IT, professional, business and digitally delivered services.
5. Economic diversification: The agreement can reduce excessive dependence on a limited number of export destinations.
6. Strategic significance: Stronger economic interdependence complements the broader India–EU Strategic Partnership, including cooperation in technology, connectivity and supply-chain resilience.
   
   

Conclusion

The India–EU FTA can become a major pillar of India’s export-led growth by combining market access with services, investment and technology cooperation, provided implementation strengthens domestic competitiveness and inclusiveness.