India EU Financial Services FTA negotiations have been formally concluded, marking a significant milestone in strengthening bilateral economic and strategic cooperation between India and the European Union.
The landmark outcome was finalized during the last round of negotiations held on January 06, 2026, under the broader India EU Free Trade Agreement (FTA) framework.
The conclusion of the India EU Financial Services FTA reflects the shared commitment of both sides to deepen collaboration in financial services by establishing a forward-looking, balanced, and mutually beneficial institutional and regulatory framework.
The agreement is aimed at facilitating market access, accelerating bilateral collaboration, and enabling deeper integration of the financial systems of both economies.
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India EU Financial Services FTA Strengthens Services Trade and Market Access
India and the European Union maintain a robust relationship in services trade, with total bilateral services trade valued at approximately $83 billion in 2024.
During the same year, India exported around $700 million worth of financial services to the EU, while imports from the EU stood at nearly $600 million.
Recognizing the growing importance of financial services in bilateral trade, both sides have worked collaboratively to unlock new opportunities for financial institutions and service providers.
The India EU Financial Services FTA provides a structured framework to promote regulatory transparency, enhance institutional cooperation, and support the expansion of financial services suppliers across borders.
Enhanced Commitments Under India EU Financial Services Annex
The India-EU Financial Services Annex represents a significant advancement beyond standard General Agreement on Trade in Services (GATS) commitments, expanding into a comprehensive framework comprising 16 articles.
The Annex introduces innovative provisions across multiple areas, reinforcing cooperation and market integration.
- Digital Payments and Real-Time Transactions
- Under the India EU Financial Services FTA, both sides have committed to collaborate on enhancing interoperability and interlinkages in electronic payment infrastructure.
- The agreement supports the development of real-time cross-border payments, remittances, merchant payments, and other financial transfers.
- These provisions align with India’s expanding digital payments ecosystem, facilitate remittance flows from the Indian diaspora in the EU, and create market access opportunities for Indian payment service providers, including those leveraging digital payment systems such as UPI.
- Fintech Cooperation and Regulatory Innovation
- Fintech cooperation emerges as a key pillar of the India-EU Financial Services FTA, marking India’s most significant achievement in structured fintech collaboration with a developed economy.
- Both parties have committed to strengthening cooperation in financial technology innovation, including exploration of new business opportunities and collaboration in areas such as supervisory technology (SupTech), regulatory technology (RegTech), and Central Bank Digital Currency (CBDC).
- These provisions provide a structured framework for regulatory learning, knowledge exchange, and collaboration between Indian and EU fintech companies.
- Credit Rating Safeguards and Non-Discriminatory Treatment
- The agreement introduces provisions ensuring that Indian financial institutions are protected from arbitrary or discriminatory credit assessment practices.
- Under the India EU Financial Services FTA, Indian institutions will receive treatment on par with domestic EU financial institutions, supporting fair market access and preventing discriminatory regulatory practices that could restrict operational capabilities.
- FDI Liberalisation and Expanded Banking Presence
- The schedules of specific commitments under the India-EU Financial Services FTA reflect progressive liberalization by both sides across banking, insurance, and other financial services sectors.
- India’s commitments incorporate recent liberalization measures, including 100% Foreign Direct Investment (FDI) in the insurance sector and enhanced FDI limits of 74% in banking.
- The agreement also introduces a liberalized bank branch licensing framework, allowing up to 15 bank branches to be established over a four-year period, an expansion from earlier GATS commitments.
These provisions enhance the competitive positioning of EU financial service suppliers in India’s growing financial services market, while EU’s liberalized offers are expected to support the expansion of Indian financial service suppliers across European markets.
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India EU Financial Services FTA: Strengthening Institutional Presence and Bilateral Investment
Currently, three Indian banks – State Bank of India, Bank of Baroda, and Bank of India – operate a combined total of five branches in the EU, while one representative office is maintained by the State Bank of India.
In India, five EU banks operate 33 branches, and 17 EU banks maintain representative offices.
The India EU Financial Services FTA, by establishing clear market access commitments, regulatory clarity, and cooperation frameworks, is expected to facilitate increased bilateral investment, institutional presence, and cross-border services delivery.
The agreement is positioned as a catalyst for expanding India’s financial services footprint in the EU while welcoming EU financial service suppliers into India’s dynamic and rapidly expanding financial services market.
