India and the European Union (EU) finalised the Free Trade Agreement (India–EU FTA) at the 16th India-EU Summit, marking a historic milestone in bilateral economic relations.
“The conclusion of this FTA positions India and the European Union as trusted partners committed to open markets, predictability, and inclusive growth. The FTA comes after intense negotiations since the re-launch of negotiations in 2022. The announcement of the FTA today marks the culmination of years of sustained dialogue and cooperation, between India and the EU, demonstrating the political will and shared vision to deliver a balanced, modern, and rules-based economic and trade partnership,” the Ministry of Commerce and Industry said in a statement.
The India-EU FTA covers trade in goods and services, rules of origin, customs and trade facilitation, trade remedies, and emerging areas such as digital trade and MSMEs. Tariffs of up to 10% on nearly USD 33 billion worth of Indian exports will be eliminated on entry into force, providing a major boost to labour-intensive sectors including textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles, it added.
The European Union is among India’s largest trading partners. In 2024-25, the bilateral trade with EU in goods stood at Rs 11.5 lakh crore (USD 136.54 billion), with Indian exports at Rs 6.4 lakh crore (USD 75.85 billion) and imports at Rs 5.1 lakh crore (USD 60.68 billion). Trade in services reached Rs 7.2 lakh crore (USD 83.10 billion) in 2024. Together, India and the EU represent the 4th and 2nd largest economies globally, accounting for about 25% of global GDP and nearly one-third of global trade.
Union Minister for Commerce and Industry Piyush Goyal described the FTA as a defining achievement in India’s global economic engagement. He said the pact goes beyond a conventional trade agreement, securing unprecedented market access for over 99% of Indian exports by trade value to the EU, while supporting the ‘Make in India’ initiative. The agreement also includes high-value commitments in services and a comprehensive mobility framework for skilled professionals.
In the automobile sector, a calibrated, quota-based liberalisation package will allow EU manufacturers to introduce high-end models in India, while opening future opportunities for manufacturing and exports from India. Indian consumers are expected to benefit from advanced technologies and greater competition, while Indian-made automobiles gain reciprocal access to EU markets.
The agreement is also set to enhance competitiveness in agriculture and processed food sectors, benefiting products such as tea, coffee, spices, fruits, vegetables and processed foods. Sensitive sectors including dairy, cereals, poultry and certain fruits and vegetables have been safeguarded to protect domestic interests.
To address non-tariff barriers, the FTA strengthens regulatory cooperation, transparency, customs procedures, and sanitary and phytosanitary measures. Commitments under the EU’s Carbon Border Adjustment Mechanism (CBAM) include technical cooperation, recognition of carbon pricing and verifiers, and targeted financial support to help Indian exporters meet emerging carbon requirements.
Services trade is expected to expand significantly, with the EU offering commitments across 144 subsectors, including IT and IT-enabled services, professional services, education, financial services, tourism and construction. India has offered access in 102 subsectors, facilitating greater EU investment and high-technology services inflows.
On mobility, the pact establishes a predictable framework covering business visitors, intra-corporate transferees and professionals, along with provisions for dependents. The EU has offered commitments in 37 sectors for contractual service suppliers and 17 sectors for independent professionals. The agreement also provides a framework for engagement on social security arrangements, student mobility and post-study work opportunities, and access for practitioners of Indian traditional medicine in select EU member states.
The FTA reinforces intellectual property protections under the TRIPS framework, recognises the Doha Declaration, and acknowledges the importance of digital libraries such as India’s Traditional Knowledge Digital Library. It also promotes cooperation in emerging areas including artificial intelligence, clean technologies and semiconductors.
With the EU becoming India’s 22nd FTA partner, the agreement, alongside FTAs with the UK and EFTA, effectively opens the European market for Indian businesses. The government said the pact embeds review and consultation mechanisms to address future challenges and evolving trade dynamics.
Aligned with the vision of “Viksit Bharat 2047”, the India–EU FTA is expected to scale up trade, enhance export competitiveness, foster innovation and create opportunities across sectors, strengthening India’s position as a trusted and forward-looking global partner.