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On 27 January 2026, India and the European Union ("EU") announced the conclusion of negotiations on a proposed Free Trade Agreement ("India-EU FTA"), marking a significant development in India's contemporary trade policy. The announcement reflects political consensus on the broad contours of the agreement following nearly two decades of intermittent negotiations, as the EU becomes India's 22nd FTA partner.
Negotiations for a comprehensive trade agreement between India and the EU commenced in 2007 under the rubric of a Broad-based Trade and Investment Agreement. Progress was suspended in 2013 due to divergences on tariff liberalization, services market access, regulatory standards, and intellectual property. Talks were formally revived in 2021 and culminated in the announcement of concluded negotiations in January 2026.
At present, the agreement remains subject to legal vetting, publication of the final treaty text, and completion of domestic ratification procedures on both sides. All figures and percentage values mentioned herein are indicative and based on provisional information in the public domain, and may vary upon publication of the final treaty text following legal scrubbing and ratification.
Scope and coverage of the India – EU FTA:
The India-EU FTA is envisaged as a comprehensive agreement covering trade in goods and services, investment facilitation, rules of origin, and dispute settlement mechanisms. The EU, acting as a single trading bloc comprising 27 Member States, has indicated that the agreement would liberalize trade across a substantial majority of tariff lines, subject to negotiated exclusions and phased implementation schedules.
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India's expected gains |
The EU's expected gains |
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The EU will eliminate tariffs on over 90% (approx.) of tariff heads, and 91% (approx.) in terms of value |
India will eliminate tariffs on 86% (approx.) of tariff heads, and 93% (approx.) in terms of value |
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Immediate duty elimination: 70.4% tariff heads covering 90.7% of India's exports. The sectors will include textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewelry and certain marine products, mines & minerals, amongst others. |
Immediate duty elimination: 49.6% of tariff heads. The sectors will include chemicals, textiles, apparels, and ceramics. |
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Phased elimination: 20.3% tariff heads covering 2.9% of India's exports will have zero duty access over 3 and 5 years for certain marine products, processed food items, arms and ammunition, chemicals, gems and jewelry. |
Phased elimination: 39.5% of tariffs heads are subject to phased elimination over 5, 7, and 10 years'. The sectors will include plastics, cars and car parts, machinery, iron steel, amongst others. |
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Tariff reduction and / or Tariff Rate Quota (TRQ): 6.1% tariff heads covering 6% of India's exports will have preferential access by way of tariff reduction for certain poultry products, preserved vegetables, bakery products amongst others or through TRQs for cars, steel, certain shrimps/ prawns products, etc. |
Tariff reduction and / or Tariff Rate Quota (TRQ): 3% of products are under phased tariff reductions, including, alcoholic beverages and few products are subject to TRQs for Apples, Pears, Peaches, Kiwi Fruit. |
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Key economic sectors for India: fisheries, chemicals, textiles, footwear and pharmaceuticals. |
Key economic sectors for the EU: agri-food, chemicals, pharmaceuticals, machinery, medical devices, avionics and automotive industries. |
Indian exporters are expected to derive significant benefits from improved access to the European Union's pharmaceutical and medical technology market, estimated at approximately USD 572 billion, which constitutes one of the world's largest and most stringently regulated healthcare markets. In parallel, labor-intensive sectors, including textiles, apparel, leather, footwear, marine products, gems and jewelry, and handicrafts, are poised to gain from preferential tariff treatment at an early stage of implementation, thereby enhancing India's export competitiveness in the EU market. Further, privileged access to services market in key sectors are intended to be provided.
In the agri-food sector, the FTA reflects a calibrated and balanced approach. While it facilitates market access for key export interests, it also preserves domestic sensitivities on both sides. In this context, the EU will maintain protection for certain sensitive agricultural products, with no tariff concessions extended to sugar and ethanol, rice and soft wheat, beef and poultry, milk powders, bananas, and honey, and well-defined tariff rate quotas applicable to products such as table grapes and cucumbers.
The FTA provides for enhanced intellectual property cooperation, including the recognition of India's Traditional Knowledge Digital Library (TKDL), reflecting a shared commitment to safeguarding traditional knowledge and preventing its misappropriation.
Ratification of the FTA
While Article 253of the Constitution of India empowers Parliament to make any law "for the whole or any part of the territory of India for implementing any treaty, agreement, or convention with any other country...", meaning India can enact domestic legislation necessary to give effect to treaty obligations, India's FTA ratification process is fairly simple. The department of commerce holds multiple rounds of inter-ministerial and stakeholder meetings before the FTA text is finalized. Thereafter, the department seeks approval of the Union Cabinet, and it does not need a nod from Parliament. Article 73 gives executive power of the Union extends to matters on which Parliament can legislate.
Rules of Origin
The Parties have also agreed upon rules of origin, significant in enforcement, which have been aligned with those contained in recent EU free trade agreements, ensuring that only goods undergoing substantial processing within either jurisdiction qualify for preferential tariff treatment. To facilitate ease of compliance, the original framework is based on self-certification by exporters, particularly benefiting small and medium-sized enterprises. Proof of origin will be furnished through a statement on origin, uploaded on a designated portal, enabling verification by the importing party's customs authorities. Any verification concerns will be addressed through administrative cooperation between EU and Indian customs authorities prior to the denial of preferential treatment.
While the conclusion of negotiations on the India-EU Free Trade Agreement represents a significant moment in India's trade engagement with the European Union, the true test of the Agreement will lie beyond its announcement. The real inflection point will emerge at the stage of ratification and, more importantly, in the manner in which the Agreement is enforced and interpreted in the contemporary global trade environment.
In this context, the observation of the Apex Court in the Authority for Advance Rulings vs. Tiger Global International Ii Holdings, decided on 15 January 2026, indicates a judicial skepticism on interpretative approaches in the interpretation and enforcement of contemporary trade agreements:
"26. No doubt entering into bilateral treaties has yielded its own good, consistency and stability. But with newer and newer trade complexities emerging in the global arena, Nations should rethink very long-term treaties. There is no need to carry the burden or legacy of formative years of treating making and even more when it comes to interpretation of such treaties"
It is notable that the proposed India-EU FTA has been widely described as the "mother of all trade deals", a characterisation driven not merely by rhetoric but by the scale of tariff liberalisation reportedly envisaged across a vast majority of goods and services traded between India and the EU, spanning multiple sectors and product heads. However, until the Agreement is finalized, ratified, and subjected to meaningful enforcement scrutiny, it remains to be seen whether the India-EU FTA will inaugurate a new phase in preferential trade arrangements aligned with present-day commercial and regulatory realities.
References:
- Fact sheet, Department of Commerce, https://www.commerce.gov.in/wp-content/uploads/2026/01/Factsheet-on-India-EU-trade-deal-27.1.2026.pdf?utm ;
- MEMO: EU-INDIA Free Trade Agreement Chapter by Chapter Summary, European Commission, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements/memo-eu-india-free-trade-agreement-chapter-chapter-summary_en?utm;
- EU and India conclude landmark Free Trade Agreement, European Commission, https://ec.europa.eu/commission/presscorner/detail/en/ip_26_184?utm.
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