India and the European Union concluded negotiations for an India–EU Free Trade Agreement (FTA) on Tuesday, January 27, at the 16th India–EU Summit.
The proposed pact aims to deepen trade ties between the world’s second and fourth largest economies during a period of geopolitical tension and economic uncertainty, the official statement said.
The European Union will offer India preferential access across 97% of tariff lines, covering 99.5% of India’s trade value, according to India’s Ministry of Commerce.
The ministry said 90.7% of India’s exports will receive immediate duty elimination in labour-intensive sectors. These include textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery, and select marine products.
In addition, 2.9% of exports will shift to zero-duty access within three to five years for specific marine products, processed foods, arms, and ammunition. Another 6% will receive preferential access through tariff reductions for items like some poultry products, preserved vegetables, and bakery goods.
The ministry said that about $33 billion of Indian exports currently facing EU import duties between 4% and 26% will enter duty-free once the FTA takes effect. Consequently, exporters could gain price competitiveness at the point of entry in the European market.
Officials framed the deal as supportive of India’s employment-linked sectors. The report highlights shrimp farming, textiles, gems and jewellery as areas that could benefit after the recent disruption from US tariffs, experts said in the report.
However, analysts also flagged compliance pressure from EU rules and standards. Economist Mitali Nikore said EU environmental requirements can be demanding, and she added that parts of India’s manufacturing base may need faster preparation.
India will provide the European Union access to 92.1% of its tariff lines, covering 97.5% of EU exports, according to the same policy summary. Nearly 49.6% of tariff lines will see immediate duty elimination, while 39.5% will be phased out over five, seven, and 10 years.
The framework also includes phased tariff reductions for about 3% of products, with trade rate quotas (TRQs) for some fruits. The list includes apples, pears, peaches, and kiwi fruit under in-quota rates.
The reported product schedules point to steep reductions in several industrial categories over a 10-year horizon. They include machinery and electrical equipment moving from tariffs as high as 44% to 0%, aircraft and spacecraft from 11% to 0%, and pharmaceuticals from 11% to 0%.
Other cited changes include motor vehicles from 110% to 10% under a quota of 250,000 units, plus lower duties on wines, spirits, beer, olive oil, and processed foods. Meanwhile, several metals and chemicals categories shift to zero duties on most lines over time, the summary said.
Beyond goods, it describes services as a core growth driver for bilateral trade. It says the European Union offered commitments across 144 services subsectors, including IT and IT-enabled services, professional services, education, and other business services.
India’s offer covers 102 subsectors that align with EU priorities, including telecommunications, maritime, financial, environmental, and professional services. The summary also outlines a mobility regime for temporary entry and stay for categories such as business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals.
The document highlights cooperation on sanitary and phytosanitary (SPS) measures and technical trade barriers (TBT), plus intellectual property provisions aligned with the WTO TRIPS framework. It also cites recognition of India’s Traditional Knowledge Digital Library (TKDL) as part of the intellectual property narrative.
Bilateral merchandise trade reached about $136 billion in 2024–25, nearly doubling over a decade, the report said. Services trade also expanded, with the summary placing India–EU services trade at about $83.10 billion in 2024.
Meanwhile, India and the European Union also advanced talks on security and defence cooperation and climate action alongside the trade track. Reuters reported that both sides worked on a draft security and defence partnership spanning maritime security, cyber threats, and defence dialogue.
India’s Defence Minister Rajnath Singh said he discussed bilateral security and defence issues with European Commission vice-president Kaja Kallas, including supply chain integration for trusted defence ecosystems.
Formal signing is expected later this year, after approvals by the European Parliament and EU member states, according to the report. The text also notes that India and the EU restarted formal talks in July 2022 after negotiations began in 2007 and stalled in 2013.