The recent signing of the FTA between India and the EU, marks a transformative moment in the history of India’s trade and profitable tactfulness. For decades, India and the EU have nurtured decreasingly significant trade relationship, but the absence of a comprehensive, binding agreement had frequently constrained the full eventuality of this cooperation. This partnership, worth over $ 24 Trillion, is a massive win for the 2 billion people in India and EU, and opens doors for 99% of India’s exports.
A Historical Context of India-EU Trade Relations
Before the signing of the FTA, trade relations between India and the EU, were governed by a series of limited agreements, concentrated largely, on request access and tariff reductions. The EU was formerly one of India’s largest trading mates, counting for around 11 sectors of India’s total trade. Still, the absence of a formal trade agreement, meant that the relationship, was constantly hindered, by complex nonsupervisory challenges, inconsistent morals, and walls in areas analogous as services, intellectual property, and investment.
In 2024-25, merchandise trade hit roughly $136.5 billion, with India’s exports leading the way at $75.8 billion. On top of that, trade in services reached another $83.1 billion, showing just how much these two economies are leaning on each other for growth.
India’s exports to the EU, primarily conforming of fabrics, Medicinals, and engineering goods, were facing walls in the form of non-tariff measures, which frequently stymied growth. Also, EU companies faced hurdles, in penetrating India’s growing request, due to nonsupervisory backups and regulatory detainments.
What the FTA Brings to the Table
Secure Strategic Access to European Market
- Immediate duty elimination for important labour-intensive sectors*, which has 70.4% tariff lines covering 90.7% of India’s exports
- Zero duty access, over 3 and 5 years, for certain marine products, processed food items, arms and ammunition, amongst others, which has 20.3% tariff lines covering 2.9% of India’s exports
- 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, amongst others, which has 6.1% tariff lines covering 6% of India’s exports.
Alignment of Product Specific Rules with Existing Supply Chains
- Mandatory balanced Product Specific Rules that require substantial domestic processing while maintaining the flexibility to source global inputs
- Allowing self-certification through a Statement on Origin, resulting in reduction in time and associated cost of compliance for Indian exporters
- Empower MSMEs, via strategic import quotas for shrimp and aluminium
- Incentivize “Make in India” through phased transitions in machinery and aerospace sectors.
Driving Agricultural Growth
- Preferential Market Access for agricultural products/ processed food products, will make them more competitive in the EU
- Such market access will strengthen farmer’s realised incomes, reinforce rural livelihoods and optimize global footprint of Indian Agri-products.
Key Growth Driver of Future Trade: Services
- Indian service providers to get stable and conducive regime in the EU market, to supply their services, in across 144 services sub-sectors
- New opportunities for Indian professionals and businesses, would be unlocked, post India’s offer on 102 sub-sectors, covering EU priorities, wherein EU businesses gets a predictable regime to bring investment and innovative services to India.
Powering India’s Talent
- Assured regime for temporary entry and stay for professionals, inlcuding business visitors, Intra-Corporate Transferees, Contractual Service Suppliers, and Independent Professionals
- Ease of movement for employees and their spouses/ dependents of Indian Corporates, established in EU, in all service sectors
- Constructive framework to enable Social Security Agreements, in 5 years with all the EU Member states
- Continuing conducive framework for entry of Indian students to study and avial post study work visa.
Other Key Benefits
- AYUSH practioners cwill be able to provide their services in EU Member states where regulations do not exist
- Reinforcement of IP Reinforcement of IP protections provided under TRIPS, exchange of views and information on their respective laws & practices
- Enhanced co-operation on SPS and TBT matters.
Note: Once the FTA is implemented, key labour-intensive exports—like textiles, footwear, and jewellery—will drop from high import duties to zero, which will give, these industries a major competitive edge in the EU market.
Indicative Sector-Wise Tariff and Market Access Commitments under the India–EU Free Trade Agreement
| Sector | Pre-FTA EU Tariff Range Coverage | Tariff Treatment under FTA for Forthcoming Trade | Key Legal / Economic Significance |
|---|---|---|---|
| Textiles & Apparel | Up to 12% | 100% tariff lines eliminated at entry into force | Immediate duty-free access strengthens India’s position in labour-intensive exports and EU value chains |
| Leather & Footwear | Up to 17% | Full tariff elimination at entry into force | Enhances competitiveness of MSME-driven sectors and supports employment generation |
| Marine Products | Up to 26% | Majority duty-free at entry; remainder phased | Significant boost to seafood exports with specific safeguards and product-specific rules |
| Gems & Jewellery | Up to 4% | 96.6% tariff lines duty-free at entry; residual phased | Facilitates high-value exports while allowing sourcing flexibility for precious inputs |
| Chemicals | Up to 12.8% | 59.3% duty-free at entry; remainder phased | Balances market access with value-addition and origin compliance |
| Plastics & Rubber | Up to 6.5% | Partial immediate elimination; remainder phased | Reduces compliance burden while protecting sensitive segments |
| Engineering Goods | Up to 22% | Preferential access with phased elimination | Strengthens India’s industrial exports and MSME-led manufacturing clusters |
| Medical Devices & Instruments | Up to 6.7% | Tariffs eliminated across 99.1% of lines | Enables cost-competitive entry into EU healthcare markets |
| Agricultural & Processed Food (selected) | Variable | Preferential access; sensitive items excluded | Enhances farmer incomes while preserving domestic food security |
| Financial Services (Services Trade) | Regulatory barriers (non-tariff) | Market access + national treatment commitments | Legal certainty on banking, insurance, fintech, and digital payments |
| Digital Payments & FinTech | Not applicable | Regulatory cooperation & interoperability | Institutional recognition of digital ecosystems and innovation collaboration |
| Services (IT, Professional, Education) | Non-tariff barriers | Commitments in 144 EU subsectors | Predictable access, mobility provisions, and MFN safeguards |
Conclusion
The India-EU FTA, is a strategic cooperation, with far-reaching counteraccusations for both India’s profitable growth and its global standing. As India takes its place as a profitable hustler, this agreement will serve as a foundation in its sweats to integrate into the global frugality, foster sustainable growth, and make a more flexible, dynamic future for its people. The signing of the FTA is a clear signal that the period of India’s profitable ascent has truly begun.
Abbreviations
- EU: European Union
- FTA: Free Trade Agreement
- MSME: Micro, Small and Medium Enterprises
- IP: Intellectual Property
- SPS: Sanitary and Phytosanitary Measures
- TBT: Technical Barriers to Trade
References
- 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#:~:text=India%20will%20eliminate%20tariffs%20on,and%2099.3%25%20for%20the%20EU.
- https://www.commerce.gov.in/wp-content/uploads/2026/01/Factsheet-on-India-EU-trade-deal-27.1.2026.pdf
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219812®=3&lang=1
Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.