New Delhi: India and the European Union today announced the conclusion of the India EU FTA, marking a historic milestone in bilateral economic relations and India’s global trade engagement.
The announcement was jointly made by Prime Minister Narendra Modi and European Commission President Ursula von der Leyen at the 16th India–EU Summit held in New Delhi.
The conclusion of the India EU FTA positions India, the world’s fourth-largest economy, and the European Union, the second-largest economy, as trusted partners committed to open markets, predictability, and inclusive growth.
Together, India and the EU account for nearly 25% of global GDP and one-third of global trade.
India EU FTA Reflects Shared Vision for Balanced and Rules-Based Trade
Negotiations for the India EU FTA were re-launched in 2022, culminating after years of sustained dialogue and cooperation.
The agreement reflects strong political will and a shared vision to deliver a modern, balanced, and rules-based economic partnership between two large and complementary economies.
The European Union remains one of India’s largest trading partners. In FY 2024–25, India–EU bilateral trade in goods stood at ₹11.5 lakh crore (USD 136.54 billion), with Indian exports valued at ₹6.4 lakh crore (USD 75.85 billion) and imports at ₹5.1 lakh crore (USD 60.68 billion). Trade in services reached ₹7.2 lakh crore (USD 83.10 billion).
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Unprecedented Market Access for Indian Exports Under India EU FTA
A defining feature of the India EU FTA is unprecedented market access, with over 99% of Indian exports by trade value gaining preferential entry into the EU.
Nearly USD 33 billion worth of labour-intensive exports – including textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods, and automobiles – will see tariffs of up to 10% reduced to zero upon entry into force.
This enhanced access is expected to significantly benefit MSMEs, artisans, women, youth, and professionals, while integrating Indian enterprises deeper into global value chains and reinforcing the ‘Make in India’ initiative.
Calibrated Auto Liberalisation Supports Make in India
The India EU FTA includes a carefully structured, quota-based auto liberalisation framework. This allows European automakers to introduce models in higher price segments in India while opening pathways for future manufacturing and exports from India.
Reciprocal market access will also enable India-made automobiles to enter the EU market, benefiting consumers through greater competition and access to advanced technologies.
India EU FTA Boosts Agriculture While Safeguarding Sensitive Sectors
India’s agricultural and processed food exports are set to gain enhanced competitiveness under the India EU FTA, covering products such as tea, coffee, spices, fruits, vegetables, and processed foods. These provisions aim to strengthen rural livelihoods and promote inclusive growth.
At the same time, India has safeguarded sensitive sectors, including dairy, cereals, poultry, soymeal, and select fruits and vegetables, ensuring domestic priorities remain protected with no market access commitments in these areas.
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Expanded Services Trade and Mobility Framework Under India EU FTA
Services trade, a dominant and fast-growing component of both economies, receives ambitious and commercially meaningful commitments under the India EU FTA.
The agreement provides certainty of market access, non-discriminatory treatment, and a strong focus on digitally delivered services.
India has secured predictable access to 144 EU services subsectors, including IT/ITeS, professional services, education, and business services. In return, the EU gains access to 102 Indian services subsectors, facilitating high-tech services and increased investment flows.
Future-Ready Mobility and Social Security Engagement
The India EU FTA establishes a facilitative mobility framework covering short-term and temporary business travel, intra-corporate transferees, contractual service suppliers, and independent professionals.
Commitments span 37 sectors for contractual service suppliers and 17 sectors for independent professionals, including IT, R&D, education, and professional services.
The agreement also provides a framework for engagement on social security arrangements over five years, along with provisions supporting student mobility and post-study work opportunities.
Additionally, India has secured access for practitioners of Indian traditional medicine to work under home titles in EU member states where such practices are unregulated.
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CBAM, Digital Trade, and Emerging Technology Cooperation
The India EU FTA includes forward-looking provisions on the EU’s Carbon Border Adjustment Mechanism (CBAM), securing assurances on flexibility, enhanced technical cooperation, recognition of verifiers, and targeted financial and technical assistance to reduce emissions.
The agreement further strengthens cooperation on digital trade, intellectual property rights aligned with TRIPS, and recognises India’s Traditional Knowledge Digital Library (TKDL). It also facilitates collaboration in emerging areas such as artificial intelligence, clean technologies, and semiconductors.
India EU FTA Marks a New Chapter in Global Trade Engagement
With the conclusion of the India EU FTA, the EU becomes India’s 22nd FTA partner. Alongside FTAs with the UK and EFTA, the agreement effectively opens the entire European market for Indian exporters, entrepreneurs, and service providers.
The India EU FTA lays the foundation for inclusive, resilient, and future-ready growth, reinforcing India’s vision of “Viksit Bharat 2047” while strengthening long-term economic and strategic cooperation between India and the 27-member European Union.
