After nearly twenty years of negotiations, the European Union and India have concluded a historic and far-reaching Free Trade Agreement (FTA). The deal creates a free trade area covering more than 2 billion people and represents one of the most ambitious trade agreements ever concluded by the EU.
At a time of growing geopolitical tensions and protectionism, the agreement underlines a shared commitment by the world’s largest democracies to open, rules-based international trade.
A major boost for EU exports
EU – India trade already exceeds €180 billion annually, supporting around 800,000 EU jobs. The new FTA is expected to double EU goods exports to India by 2032, eliminating or reducing tariffs on up to 96% of EU exports. This could save European exporters around €4 billion per year in duties.
Key opportunities for industry and agri-food
The agreement delivers unprecedented market access for European producers:
- Car tariffs reduced from 110% to 10% (within quotas)
- Near-total elimination of tariffs on machinery, chemicals and pharmaceuticals
- Significant tariff cuts for wine, olive oil and processed food products
Sensitive EU agricultural sectors remain fully protected.
Benefits for SMEs and service providers
A dedicated SME chapter helps smaller companies navigate the agreement through:
- simplified customs procedures
- improved transparency and regulatory predictability
- dedicated EU–India SME contact points
EU service providers gain privileged access to the Indian market, particularly in financial services and maritime transport, the most ambitious commitments India has ever made in this area.
Sustainability at the core
The FTA includes binding commitments on:
- labour rights and high-quality working conditions
- environmental and climate protection
- women’s economic empowerment and responsible business conduct
An EU–India climate cooperation platform is also planned to support long-term sustainable industrial transformation.
What happens next?
Before entering into force, the agreement must be:
- legally reviewed and translated
- approved by EU Member States and the European Parliament
- ratified by India
Once finalized, the FTA will usher in a new era in EU–India economic relations, a process that could possibly take until the end of this year.
The treaty can only come into effect afterwards, which may still take until the end of this year.
In short: this agreement offers European companies a unique opportunity to expand into one of the world’s fastest-growing markets with clearer rules, lower barriers and long-term strategic impact.
If you would like to know more, our consultants will be happy to assist you.
