Spotlight

INDIA–EU FREE TRADE AGREEMENT CONCLUDED

A STRATEGIC BREAKTHROUGH IN INDIA’S GLOBAL TRADE ENGAGEMENT

Hon’ble Prime Minister Shri Narendra Modi and Euro‑ pean Commission Presi‑ dent H.E Ms. Ursula von der Leyen, today jointly announced the conclusion of the India–Euro‑ pean Union Free Trade Agreement (India–EU FTA) at the 16th India–EU Summit, held during the visit of the European leaders to India. This an‑ nouncement marks a historic mile‑ stone in India–EU economic rela‑ tions and trade engagement with key global partners.

The conclusion of this FTA posi‑ tions India and the European Union as trusted partners committed to open markets, predictability, and in‑ clusive growth.

The FTA comes after intense nego‑ tiations since the re‑launch of ne‑ gotiations in 2022. The announce‑ ment of the FTA today marks the culmination of years of sustained dialogue and cooperation, between India and the EU, demonstrating the political will and shared vision to deliver a balanced, modern, and rules‑based economic and trade partnership.

The European Union is India’s one of the largest trading partner, with bilateral trade in goods and ser‑ vices growing steadily over the years. In 2024–25, India’s bilateral trade in goods with the EU stood at INR 11.5 Lakh Crore (USD 136.54 billion) with exports worth INR 6.4 Lakh Crore (USD 75.85 billion) and imports amounting to INR 5.1 Lakh Crore (USD 60.68 billion). India‑EU trade in services reached INR 7.2 Lakh Crore (USD 83.10 billion) in 2024.

India and EU are 4th and 2nd larg‑ est economies, comprising 25% of Global GDP and account for one third of global trade. Integration of the two large diverse and comple‑ mentary economies will create un‑ precedented trade and investment opportunities.

Union Minister for Commerce and Industry, Shri Piyush Goyal, lauded the strategic vision and steadfast leadership of Hon’ble Prime Minis‑ ter Shri Narendra Modi. He stated:

“The conclusion of the India–Euro‑ pean Union Free Trade Agreement represents a defining achievement in India’s economic engagement and global outlook. This supports India’s approach to secure trusted, mutually beneficial and balanced partnerships.

Beyond a conventional trade deal, it represents a comprehensive part‑ nership with strategic dimensions and is one of the most consequen‑ tial FTA. India has secured unprec‑ edented market access for more than 99% of Indian exports by trade value to the EU that also bolsters the ‘Make in India’ initiative. Beyond goods, it unlocks high‑value com‑ mitments in services complemented by a comprehensive mobility frame‑ work enabling seamless movement of skilled Indian professionals.

India, powered by a young and dy‑ namic workforce and one of the fastest‑growing major economies, stands poised to leverage this FTA to create jobs, spur innovation, un‑ lock opportunities across sectors, and enhance its competitiveness on the global stage.”

The India‑EU trade pact covers conventional areas such as trade in goods, services, trade remedies, rules of origin, customs and trade facilitation, as well as emerging ar‑ eas such as SMEs and digital trade, amongst others.

The India–EU FTA gives a decisive boost to its labour‑intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineer‑ ing goods, and automobiles bring‑ ing down tariffs up to 10% on almost 33 bn USD of exports to zero on entry into force of the Agreement. Beyond enhancing competitive‑ ness, it empowers workers, artisans, women, youth, and MSMEs, while integrating Indian businesses more deeply into global value chains and reinforcing India’s role as a key play‑ er and supplier in global trade.

On automobiles, calibrated and carefully crafted quota based auto liberalisation package will not only allow EU auto makers to introduce their models in India in higher price bands but also open the possibili‑ ties for Make in India and exports from India in future. Indian con‑ sumers to benefit from high tech products and greater competition. The reciprocal market access in EU market will also open up opportuni‑ ties for India made automobiles to access EU market.

India’s agricultural and processed food sectors are poised for a trans‑ formative boost under the India–EU FTA, creating a level playing field for Indian farmers and agrarian en‑ terprises. Key commodities such as tea, coffee, spices, fresh fruits and vegetables, and processed foods will gain enhanced competitiveness, strengthening rural livelihoods, pro‑ moting inclusive growth, and rein‑ forcing India’s position as a trusted global supplier. India has prudently safeguarded sensitive sectors, in‑ cluding dairy, cereals, poultry, soy‑ meal, certain fruits and vegetables, balancing export growth with do‑ mestic priorities.

Beyond tariff liberalisation, the FTA provides measures to tackle non‑tariff barriers through strength‑ ened regulatory cooperation, great‑ er transparency, and streamlined customs, Sanitary and Phytosani‑ tary (SPS) procedures, and Techni‑ cal Barriers to Trade disciplines.

Through CBAM provisions, commit‑ ments have been secured including a forward‑looking most‑favoured nation assurance extending flexibili‑ ties if any granted to third countries under the regulation, enhanced technical cooperation on recogni‑ tion of carbon prices, recognition of verifiers, as well as financial as‑ sistance and targeted support to reduce greenhouse gas emissions and comply with emerging carbon requirements.

Services being dominant and fast‑ er‑growing part of both economies will trade more in future. Certainty of market access, non‑discrimina‑ tory treatment, focus on digitally delivered services, ease of mobility will provide boost to India’s ser‑ vices exports.

The FTA secures expanded and commercially significant commit‑ ments from the EU across key sec‑ tors of Indian strength, including IT and IT‑enabled services, profes‑ sional services, education, financial services, tourism, construction, and other business sectors.

India’s predictable access to EU’s 144 subsectors (which includes IT/ ITeS, Professional Services, Other Business Services and Education Services) will provide boost to In‑ dian service providers and enable them to provide competitive world class Indian services to EU’s con‑ sumers while EU’s access to 102 subsectors offered by India will bring in high tech services, invest‑ ment into India from EU resulting in a mutually beneficial arrangement.

On mobility, the India‑EU FTA provides a facilitative and predictable framework for business mobility covering short‑term, temporary and business travel in both directions. These enable professionals to travel between the two economies to provide services under different scenarios. EU and India is providing mobility commitments to each other for IntraCorporate Transferees (ICT) and Business Visitors, along with entry and working rights for dependents and family members of ICTs. The EU has also offered commitments in 37 sectors/sub‑sectors for Contractual Service Suppliers (CSS) and 17 sectors/sub‑sectors for Independent Professionals (IP), many of which are sectors of interest to India, including Professional Services, Computer and related Services, Research and Development Services, and Education Services.

India also secured a framework to constructively engage on Social Se‑ curity Agreements over a five‑year horizon, together with framework supporting student mobility and post‑study work opportunities.

Additionally, India has also secured access for practitioners of Indian Traditional Medicine to work under home title in EU Member States where traditional medical practices are not regulated.

In financial services, the FTA pro‑ motes cooperation to advance in‑ novation and secure cross‑border electronic payments, while providing India with enhanced market ac‑ cess across several major EU mem‑ ber states. These provisions are expected to deepen financial inte‑ gration and support the growth of financial services trade.

These commitments not only unlock high‑value employment opportunities but also reinforce India’s position as a global hub for talent, innovation, and sustainable eco‑ nomic growth.

The FTA reinforces intellectual property protections provided un‑ der TRIPS relating to copyright, trademarks, designs, trade secrets, plant varieties, enforcement of IPRs, affirms Doha Declaration and rec‑ ognises the importance of digital libraries, specifically the Traditional Knowledge Digital Library (TKDL) project initiated by India.

The FTA is expected to facilitate co‑ operation in critical areas like Artifi‑ cial Intelligence, clean technologies, and semiconductors, supporting India’s technological advancement.

The FTA is expected to substantial‑ ly scale up trade, enhance export competitiveness, and integrate Indian businesses more deeply into the European and global value chains.

The India–EU FTA marks a new chapter in bilateral economic en‑ gagement, strengthening trade, and strategic cooperation between India and the 27‑member EU bloc. Cognizant of multifarious objec‑ tives placed on trade, dynamic na‑ ture of trade, fast evolving tech‑ nologies and increasing regulatory complexities, the Agreement em‑ beds multiple review, consultation and response mechanisms to deal with new, sudden challenges which emerge in future. The Agreement relies on strong stewardship and trust to deliver gains for both sides.

EU becomes India’s 22nd FTA part‑ ner. The Government since 2014 has signed trade deals with Mauritius, UAE, UK, EFTA, Oman and Austra‑ lia, and announced trade deal with New Zealand. In 2025, India signed trade deal with Oman and UK and announced conclusion of trade deal with NZ.

The India‑EU trade deal, along with India’s FTA with the UK and the EFTA effectively opens up the entire European market for Indian businesses, exporters and entrepreneurs.

Beyond boosting commerce, it re‑ inforces shared values, fosters in‑ novation, and creates opportunities across sectors and stakeholders from MSMEs, women and skilled professionals to farmers and ex‑ porters. Aligned with India’s vision of “Viksit Bharat 2047,” the FTA po‑ sitions India as a dynamic, trusted, and forward‑looking partner on the global stage, setting the founda‑ tion for inclusive, resilient, and fu‑ ture‑ready growth for both regions.