India–EU Free Trade Agreement Marks Strategic Trade Breakthrough

The FTA follows sustained negotiations since talks were relaunched in 2022 and reflects a shared strategic vision between the world’s fourth- and second-largest economies, together accounting for about 25 per cent of global GDP and nearly one-third of global trade. The European Union remains one of India’s largest trading partners, with bilateral goods trade valued at about Rs 11.5 trillion in 2024–25, while services trade reached nearly Rs 7.2 lakh crore.

Under the agreement, over 99 per cent of Indian exports by value will receive preferential access to the EU market. Labour-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, engineering goods and automobiles are expected to benefit significantly, supporting MSMEs, artisans, women and youth employment. Around USD 33 billion of exports in these sectors will see tariffs reduced to zero on entry into force of the pact.

The agreement also delivers commercially meaningful market access in services, including IT and IT-enabled services, professional services, education, financial services, tourism and construction, alongside a structured mobility framework for skilled and semi-skilled professionals. Carefully calibrated provisions on automobiles, agriculture and dairy safeguard domestic sensitivities while enabling reciprocal opportunities.

Beyond trade liberalisation, the FTA strengthens cooperation on non-tariff barriers, customs facilitation, sustainability and emerging areas such as digital trade, clean technologies, artificial intelligence and semiconductors. With built-in review and consultation mechanisms, the India–EU FTA lays the foundation for inclusive, resilient and future-ready growth, reinforcing India’s broader global trade strategy.