European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi announced the conclusion of negotiations for the Free Trade Agreement (FTA) between the European Union and India.
India, currently the world’s fourth-largest economy and the EU’s ninth-largest trading partner, represents a market of major strategic importance for European companies. According to projections, the agreement could double the EU’s annual exports to India by 2032, mainly through the elimination or reduction of 96.6% of tariffs applied to European products. European exporters are estimated to save up to €4 billion annually in customs duties.
An Unprecedented Level of Market Opening
The FTA represents the most ambitious trade opening ever granted by India to a partner country, providing a significant competitive advantage to numerous European industrial sectors. Key tariff reductions or eliminations include:
- Aircraft and spacecraft: from 11% to 0% for almost all products within 10 years.
- Machinery and electrical equipment: from up to 44% to 0% within 10 years.
- Chemicals: from 22% to 0% within 10 years.
- Motor vehicles: from 110% to 10% for a quota of 250,000 vehicles per year.
- Iron and steel: from 22% to 0% within 10 years.
- Pharmaceutical products: from 11% to 0% within 10 years.
- Wines: from 150% to 75% upon entry into force, with a gradual reduction to a minimum of 20%.
- Olive oil: from 45% to 0% within 5 years.
- Processed agri-food products: from up to 50% to 0%.
Boost for Services and Access to the Indian Market
In the services sector, the agreement will grant European companies greater access to the Indian market, including key areas such as financial services and maritime transport. Notably, it incorporates the most ambitious commitments ever undertaken by India in financial services.
Rules of Origin and Safeguards
Regarding rules of origin, both parties have agreed on provisions to ensure that only products sufficiently transformed within the EU or India will benefit from the preferential tariffs under the agreement.
Strategic Cooperation Beyond Trade
The trade agreement is accompanied by a Security and Defence Partnership and a Joint Strategic Agenda for 2030, reinforcing the broader framework of cooperation between the two regions.
In parallel, separate negotiations will continue on an Investment Protection Agreement and an Agreement on Geographical Indications.
Next Steps
Following legal review and translation of the text, the European Commission will submit proposals to the Council for the signing and conclusion of the agreement. Once adopted by the Council, the EU and India will be able to proceed with the signature.
The agreement will subsequently require the consent of the European Parliament and a formal decision by the Council to enter into force. Ratification by India will also be necessary. No specific timeline has been announced at this stage.
Do You Need Advice to Leverage This Agreement?
The conclusion of this Free Trade Agreement opens up new opportunities for European companies interested in exporting, expanding, or establishing operations in the Indian market.
At Feliu N&I, we provide specialized advisory services to support companies in identifying opportunities, assessing tariff impact, designing market entry strategies, and finding local partners.
If you would like to evaluate how this agreement may benefit your business, we will be pleased to assist you.
