EU-India Free Trade Agreement: Political Agreement Reached

In January 2026 the European Union (EU) and India announced that they had reached a political agreement on a Free Trade Agreement (FTA). Negotiations began in 2007 but were suspended in 2013 after several rounds failed to resolve differences on tariffs, services and intellectual property. Talks were formally resumed in 2022.

The EU and India already maintain significant economic relations. In 2024 bilateral trade in goods reached around €120 billion, making the EU one of India’s largest trading partners. Services trade has also expanded, reaching almost €60 billion in 2023. If implemented, the FTA will form one of the largest bilateral trade frameworks concluded by the European Union.

With the political agreement now reached, the next step is the finalisation of the legal text and the ratification procedures required on both sides before the FTA can enter into force.

Goods

Market access for goods is one of the main elements of the agreement. Tariff reductions are expected across a wide range of products traded between the EU and India.

Under the political agreement, the EU will remove tariffs on more than 90 % of tariff lines, corresponding to around 91 % of the value of imports from India. India will eliminate tariffs on around 86 % of tariff lines, representing about 93 % of EU exports by value. With additional partial liberalisation, the overall coverage of trade liberalisation will reach approximately 99 % of EU imports from India and about 96 % of EU exports to India.

India currently applies relatively high tariffs in several sectors of interest to European exporters, including automobiles, machinery, wines and spirits and certain agricultural products. The FTA may therefore improve conditions for EU companies exporting industrial and agricultural goods to India. And for India, the agreement may further facilitate exports to the EU in sectors such as textiles and clothing, engineering goods, pharmaceuticals and certain agricultural products.

Tariff reductions are expected to be implemented gradually rather than immediately. Sensitive sectors on both sides may be subject to longer transition periods or only partial liberalisation. Furthermore, preferential tariff treatment will depend on compliance with the agreement’s rules of origin.

Technical Regulations

The EU-India negotiations addressed issues such as product standards, certification procedures and regulatory transparency. Exporters often need to prove that their products comply with the regulatory requirements of the importing market, which can involve testing, certification and documentation.

Provisions in this area generally aim to improve transparency and predictability in regulatory processes rather than to harmonise rules between the EU and India. The agreement also includes provisions related to customs cooperation and trade facilitation. These measures address issues such as information exchange between customs authorities and the use of electronic documentation in cross-border trade.

Services

Trade in services is another important component of the agreement. Both the EU and India committed to improve market access for service providers in selected sectors. According to the negotiated framework, the EU grants India access to more than 140 service sub-sectors, while India opens over 100 service sub-sectors to EU providers.

These sectors include financial services, telecommunications, maritime transport and certain professional services. The agreement will reduce some of the restrictions that currently apply to foreign service providers. The FTA also addresses regulatory conditions affecting the provision of services. This includes licensing procedures, administrative requirements and regulatory transparency for companies operating in another market.

Intellectual Property

The FTA includes provisions relating to the protection of intellectual property rights. These provisions address areas such as trademarks, patents, industrial designs and copyright protection. Transparent intellectual property rules are particularly relevant for companies operating in sectors where branding is important, including e.g. pharmaceuticals, technology and consumer products.

Parallel negotiations between the EU and India are also addressing the protection of geographical indications. These rules protect the names of products associated with a specific region, particularly in the case of certain wines, spirits and agricultural products.

Labour Law and Sustainable Development

The agreement contains provisions relating to labour rights and environmental protection, which confirm commitments under international frameworks such as the conventions of the International Labour Organization and the Paris Agreement on climate change. They also include commitments relating to climate cooperation and sustainable economic development. Implementation of these provisions generally relies on cooperation and dialogue between the parties.

Investment

For many companies, entering a foreign market involves establishing subsidiaries, branches or other forms of commercial presence. Trade agreements often address such issues by clarifying the regulatory framework for market entry and business operations.

Questions relating to the protection of investments and dispute settlement are not included directly in the FTA. Instead, the EU and India are negotiating a separate EU-India Investment Protection Аgreement addressing standards of investment protection and dispute resolution.

Entry into Force

Although negotiations have been concluded politically, the agreement must still undergo several steps before it becomes legally binding.

The legal text must be finalised after which the agreement will be submitted for approval through the relevant procedures in the European Union and India. Only once these processes are completed will the agreement enter into force.

Grzegorz Kłodkowski