India–EU Free Trade Agreement Concluded at 16th India–EU Summit

India and the European Union on 27 January jointly announced the conclusion of the India–EU Free Trade Agreement (FTA) at the 16th India–EU Summit, marking a major breakthrough in economic ties between the two strategic partners.

Market Access and Tariff Liberalisation
Under the agreement, India has secured preferential access to EU markets across 97% of tariff lines, covering 99.5% of trade value. In return, India will offer 92.1% of its tariff lines, accounting for 97.5% of EU exports, reflecting a balanced and mutually beneficial trade arrangement.

Boost to Labour-Intensive Sectors
The FTA is expected to provide a decisive push to India’s labour-intensive sectors, including textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods, and automobiles. Tariffs of up to 10% on nearly USD 33 billion worth of Indian exports will be reduced to zero upon entry into force of the agreement.

Automobiles: Calibrated Liberalisation
In the automobile sector, a carefully designed quota-based liberalisation package will allow EU automakers to introduce high-end models in India, while simultaneously opening avenues for Make in India, technology transfer, and future automobile exports from India. Indian consumers are expected to benefit from advanced technologies and increased competition.

Services and Mobility Commitments
The agreement unlocks high-value commitments in services, supported by a comprehensive mobility framework enabling smoother movement of skilled Indian professionals. India will gain predictable access to 144 EU services subsectors, including IT/ITeS, professional services, business services, and education.
In turn, the EU will gain access to 102 Indian services subsectors, encouraging high-tech services and greater EU investment in India, creating a mutually reinforcing partnership.

Addressing Non-Tariff Barriers
The FTA includes robust provisions to tackle non-tariff barriers through strengthened regulatory cooperation, enhanced transparency, streamlined customs procedures, and improved Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) disciplines.

Trade and Economic Significance
The European Union is among India’s largest trading partners. In 2024–25, India–EU trade in goods 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 at INR 5.1 lakh crore (USD 60.68 billion). Trade in services reached INR 7.2 lakh crore (USD 83.10 billion) in 2024.

Global Impact
India and the EU are the 4th and 2nd largest economies, together accounting for 25% of global GDP and nearly one-third of global trade. The integration of these two large, diverse, and complementary economies is expected to generate unprecedented trade and investment opportunities, strengthening global economic stability and growth.